Pharma and Biotech
FEATURED RESEARCH, TESTIMONY AND ANALYSIS:
The United States faces a daunting budgetary outlook. To avert an impending debt crisis, policymakers must tackle the unsustainble growth in entitlments in general, and Medicare spending in particular. Imposing mandatory prescription drug rebates in Medicare Part D has been proposed as a solution. In this report, beneficiary data is used to evaluate the impact of introducing Medicaid-style rebates into the Medicare Part D program. Despite any cosmetic appeal, such rebates would dramatically raise, not lower, the premiums paid by America’s seniors and seriously undermine proven success in harnessing competition in entitlement programs.
Employment Impact of Proposed Mandatory Part D Drug Rebates
The President and some members of Congress have proposed requiring that prescription drug manufacturers pay rebates to the federal government for drugs dispensed to Medicaid/Medicare dual-eligible beneficiaries and other low-income seniors through the Medicare Part D program. (The required rebates would be in addition to the manufacturer-paid rebates already in the Part D program due to the market-based negotiations between manufacturers and Part D plans).The Office of Management and Budget (OMB) estimates that the President’s proposal will reduce federal outlays by $135 billion over 10 years. However, the reduced revenue is likely to substantially affect the pharmaceutical industry, and OMB did not provide any estimates of the effect on jobs – somewhat ironic in that the President’s proposal came in the context of his “jobs bill.” In this short paper, we take a step toward filling that analysis gap. In particular, using the historic relationship between revenues and employment, we find that by 2021 the proposal could reduce pharmaceutical and related employment by up to 238,000 jobs. APPENDIX- Data and Figures
The Joint Select Committee on Deficit Reduction must focus on mandatory spending programs to be successful. Unfortunately, proposals to alter Medicare Part B drug reimbursement place a successful program and the patients it supports at risk and thus are not sound and sustainable reform policies that support overall debt reduction.
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ADDITIONAL RESEARCH, TESTIMONY AND ANALYSIS:
Biosimilars User Fee Act Primer
The Patient Protection and Affordable Care Act (PPACA), signed into law by President Obama on March 23, 2010, amends the Public Health Service Act (PHS Act) to create an abbreviated licensure pathway for biologic products that are demonstrated to be “biosimilar” to or “interchangeable” with an FDA-licensed biologic product. This pathway is provided in the part of the law known as the Biologics Price Competition and Innovation Act (BPCI Act).
Under the BPCI Act, a biologic product may be demonstrated to be “biosimilar” if data show that, among other things, the product is “highly similar” to an already-approved biologic product. Until President Obama signed the PPACA in March of 2010, there was no FDA approval process for biosimilars. In efforts to implement the BPIA, FDA and industry stakeholders have conducted meetings to develop a user fee system for the review of biosimilars and interchangeable products for fiscal years 2013 to 2017, to be named the 351(k) program. As such, this primer will provide an introduction to biosimilars and discuss the implications of the 351(k) program for the healthcare system and industry.
Generic Drug User Fee Act Primer
Formed under the passage of the Drug Price Competition and Patent Term Restoration Act of 1984, more commonly known as the Hatch-Waxman Act, generic drugs have garnered attention in the health care spotlight. With almost two thirds of all prescriptions filled by generic drugs, the Generic Drug User Fee Act (GDUFA) is slated to be authorized by Congress before the start of fiscal year 2013. Similar to the Prescription Drug User Fee Act (PDUFA), GDUFA outlines the fee structure and review plans that generic drug companies will pay to have their products reviewed by the Food and Drug Administration (FDA). The FDA, generic drug industry, and stakeholders have agreed on the upcoming GDUFA legislation set to be voted on by Congress.
Weekly Checkup No. 017: Taking the 'Big' Out of 'Big Pharma'
Despite numerous claims of corporate mergers and acquisitions, the height of the pharmaceutical industry seems to be coming to an end. In attempt to compete with other medical and pharmaceutical entities while at the same time complying with industry regulations, pharmaceutical companies have been forced to resort to spending a considerable amount on advertising. However, with shrinking profit margins, the expiration of several blockbuster drugs and numerous other competitors like generic drug companies and biotechnology companies, it brings into question, is it still beneficial for Big Pharma to be big?
Weekly Checkup No. 015: Can Too Much Generic Competition be a Bad Thing?
The Hatch-Waxman Act of 1984 paved the way for generic pharmaceuticals to reach market more easily by allowing generic drug manufacturers to submit an Abbreviated New Drug Application (ANDA) and show that their drug is “bioequivalent” to the brand name version. This allowed generic companies to bypass costly clinical trials that are required of innovator drugs. Hatch-Waxman also included an incentive for generic manufacturers to challenge the patents held by brand name drugs, providing a 180-day period of exclusivity for the first company to win a challenge, and permitted generic drug companies to conduct bioequivalence studies before brand name patents expired.
Prescription Drug User Fee Act Primer
The Food and Drug Administration (FDA), specifically, the Center for Drug Evaluation and Research (CDER), is responsible for the review of prescription drugs before marketing. In 1992, Congress passed the Prescription Drug User Fee Act (PDUFA) to provide resources for the FDA to review drugs in a timely manner. Since PDUFA I, there have been three reauthorizations of the act. PDUFA IV is set to expire September 30th, 2012, thus the FDA, stakeholders and the pharmaceutical industry are currently discussing new proposals and guidelines for PDUFA V.
The budding biotechnology industry covers a wide range of human health biologic products and technologies that are created by way of a living system. Examples of biologic products include biologic drugs, blood and blood components, vaccines, pharmacogenetics, gene therapy, and genetic testing. The biotechnology industry also involves technologies developed for agriculture, animal health and environmental protection, but this primer will focus on the human health portion of the industry. Within the Food and Drug Administration (FDA), the Center for Drug Evaluation and Research (CDER) is responsible for the review and approval of biologic drugs while the Center for Biologics Evaluation and Research oversees the regulation of other biologic products.
Pharmaceutical Industry Primer
The pharmaceutical industry produces prescription and over-the-counter drugs as well as biologic products primarily intended to treat human illnesses. Biologic products are created through the use of living systems and include vaccines, blood and blood components, gene therapy and tissues. A brand name drug is an innovator drug which has undergone an extensive research and development (R&D) process and is initially protected by patents. A generic drug is chemically equivalent to a brand name drug that has lost patent protection and is sold at significantly discounted prices. The Center of Drug Evaluation and Research (CDER) of the Food and Drug Administration (FDA) is the government agency in charge of regulation and oversight of this industry.
