Health Care Policy Report™ offers the inside story on health care regulation and policy, with behind-the-scenes news and analysis of developments in Congress, the federal agencies, and the...
Feb. 4 — The FDA isn't working fast enough to approve generic drug applications, the chairman of the House Oversight and Government Reform Committee said at a Feb. 4 hearing on drug prices.
“I believe that the FDA has failed to meet its statutory responsibilities,” committee Chairman Jason Chaffetz (R-Utah) said. “If somebody increases the price of a prescription drug, that’s going to invite more competition, but if that competition can’t get approval from the FDA, there will be no competition.”
Janet Woodcock, director of the Food and Drug Administration's Center for Drug Evaluation and Research, said that before the Generic Drug User Fee Amendments (GDUFA) were enacted in 2012, the FDA's generic drug review program fell behind and a large backlog of generic drug applications accrued. However, under GDUFA, the generic drug industry agreed to pay about $300 million in user fees each year and this has allowed the agency to improve its generic drug review program, she said.
The backlog included 2,866 generic drug applications on Oct. 1, 2012, Woodcock said. The agency has completed “first actions” on 84 percent of those applications, she said. First actions can include an approval, a tentative approval, a complete response letter, a refusal to file or a withdrawal.
Woodcock said that even after the backlog is eliminated, there still will be drugs that don't have generic competition. She said some drugs have patent or exclusivity protections, and there are some drugs that don't have patent or exclusivity protections but a generic application hasn't been submitted to the FDA.
The discussion of FDA's generic approvals came at a hearing at which lawmakers criticized drugmakers for their steep price increases, and at which Martin Shkreli, the former chief executive of drug company Turing Pharmaceuticals, invoked the Fifth Amendment and didn't testify further.
Mark Merritt, president and chief executive officer of the Pharmaceutical Care Management Association (PCMA), said that pharmacy benefit managers (PBMs) are working to lower drug costs, expand access and improve the quality of pharmacy benefits.
“While PBMs can negotiate significant discounts and rebates when drugs are subject to competition, the options to achieve lower prices are limited when there is an absence of it,” Merritt said in his written testimony. “When a sole-source brand drug with no close substitutes enters the market, often similar competing brand drugs will subsequently enter the market, and eventually the original drug's patent will expire and generic versions of it will be produced. However, for various reasons, generic versions of brand drugs do not always come to market after the original drug's market exclusivity has expired.”
Merritt told the committee that a number of policy changes could be made that would increase competition and lower drug costs.
“Rather than directly intervening in manufacturer pricing, policy makers could better encourage price competition in the marketplace by accelerating approval of drugs in development for conditions where the cost of existing medications is a barrier to treatment and where manufacturers of current therapies have little incentive to compete on price,” Merritt said. “For example, in classes where there are only one or two drugs, new brand applications could be fast-tracked.”
Merritt also said the FDA could compile a list of all off-patent drugs that don't have generic or brand substitutes.
“This initial indexing will allow stakeholders to understand the number and types of such products,” Merritt said. Policy makers and stakeholders also could explore how to encourage competition for these drugs, he said.
Additionally, Merritt said removing the backlog of generic drug applications at the FDA would increase competition.
Merritt also criticized the use of copay coupons by brand drug companies, saying these coupons encourage patients to take more expensive drugs when a less expensive alternative is available. He said copay coupons “are designed to encourage insured patients to bypass less expensive drugs (which typically have lower copays) when multiple options are on the formulary, raising the cost of drug coverage.”
The committee also examined recent increases in the prices of drugs made by Turing and by Valeant Pharmaceuticals.
Turing purchased the drug Daraprim in 2015 and increased the price from $13.50 to $750 per tablet. Daraprim is used to treat toxoplasmosis, a parasitic infection that can be life-threatening for people with HIV/AIDS, cancer and other conditions that cause compromised immune systems.
Shkreli, who was the chief executive officer of Turing at the time the drug was purchased, was asked to leave the hearing after invoking his Fifth Amendment rights.
Nancy Retzlaff, the chief commercial officer of Turing, said she was “comfortable” with the decision to increase the price of Daraprim because Turing is committed to ensuring access to every patient. She said a third of patients who take Daraprim get it through discounted government programs for one penny per pill. Retzlaff said that for patients who can't obtain the drug through government programs, the company offers Daraprim free of charge to patients who are at or below 500 percent of the federal poverty level. Turing also offers copay assistance and other programs to help patients, she said.
Like Turing, Valeant also raised the price of older drugs. The company tripled the cost for the heart treatment Nitropress and raised the price of another heart drug, Isuprel, by 525 percent.
Howard B. Schiller, interim chief executive officer and director of Valeant, said his company has made mistakes and the company's future price increases “will be within industry norms and more modest.”
Schiller said Valeant has created a rebate program to provide up to a 30 percent discount for Nitropress and Isuprel through arrangements with hospital group purchasing organizations. He also said that under its recent partnership with Walgreens, Valeant will be offering 10 percent price reductions on some of its most popular drugs and up to 95 percent reductions for a large number of its branded drugs.
Turing is based in New York and Valeant is based in Canada.
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More information on the hearing is available at https://oversight.house.gov/hearing/developments-in-the-prescription-drug-market-oversight/.
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