Budgets, Biosimilars, and Bad Ads

Nov 01, 2012

Jill Wechsler
While the nation was embroiled in this year's presidential elections and heated debate over the impact of health reform, a number of important legal and regulatory issues absorbed pharmaceutical executives. One bit of good news was Congressional approval of legislation that stiffens penalties for crimes involving theft and hijacking of drugs and medical devices. Just before leaving town in September, the Senate quietly enacted the Safe Doses Act (HR 4223), which had been approved by the House in June, and President Obama signed the bill into law last month. Manufacturers have long complained that criminals face stiffer penalties for stealing handbags and CDs than prescription drugs. The legislation, which was sponsored by Rep. James Sensenbrenner (R-Wis) and Sen. Charles Schumer (D-NY), changes that by imposing hefty fines and jail sentences for falsification, alteration or forgery of medical products and their subsequent transportation or sale.

Meanwhile, FDA stepped up its campaign against illegal Internet drug sales, joining the fifth "Operation Pangea" coordinated by Interpol. The recent effort shut down more than 18,000 pharmacy websites worldwide and led to the seizure of about $10 million worth of drugs. In the United States FDA took action against some 4,000 Internet pharmacies, sending out warning letters, seizing illegal products, and shutting websites—at least temporarily. At the September meeting of the Partnership for Safe Medicines, commissioner Margaret Hamburg also described FDA's "BeSafeRx" campaign, which aims to educate consumers on the dangers of Internet drug purchases.

All this took place amidst a mounting national outcry over a meningitis outbreak linked to contaminated injectables from a Massachusetts compounding pharmacy. The health crisis focused attention on FDA's limited authority to regulate these operators and generated calls for legislation to remedy the problem, a move supported by both parties.

During the Congressional recess, discussions continued over legislative proposals for establishing a national drug track-and-trace system. Manufacturers and FDA officials still hope to devise a workable program for monitoring drugs through the supply chain, but have been stuck over whether to start with a more limited batch-level tracking approach, versus the feasibility of requiring tracking for every vial, as FDA prefers.

The prospect of across-the-board federal budget "sequestration" to reduce the projected $1.2 trillion budget deficit began to generate "savings" proposals from interest groups on all sides. The Pharmaceutical Care Management Association (PCMA), which represents pharmacy benefit managers (PBMs), weighed in last month with its list for cutting federal spending on prescription drugs by $100 billion over 10 years. PCMA urges more generic drug use by Medicaid and Medicare Part D drug plans, expanded mail order services for home-bound elderly patients, and an end to Part D "protected drug classes" to permit broader price negotiations. The PBMs also want to drop tax deductions for direct-to-consumer drug advertising to make it harder for brand manufacturers to drive consumer use of their more expensive products.

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