Pharma Challenges for 2014

Jan 01, 2014

Jill Wechsler
A midst the turmoil over implementing Obamacare, federal policy makers continue to seek ways to prevent disease and improve care while reining in health care spending. Innovative therapies that keep patients out of hospitals promise to help realize these goals, provided industry, regulators and policymakers can address key scientific, regulatory and marketing questions in the coming months:

Will health reform expand drug coverage?

The promise of Obamacare is that extending coverage to millions of uninsured Americans will greatly increase drug utilization and reimbursement. But the picture has been clouded by reports of new exchange plans with limited formularies and high co-pays for medicines, particularly for specialty drugs. Such actions threaten patient access to needed therapies, generating talk of legislation to curb specialty tiers and to extend Medicare Part D "protected drug classes" to private plans.

Are U.S. price controls inevitable?

Many analysts blame access problems on high drug prices, particularly compared to lower cost medicines in Europe and other regions. So far, pharma companies have deflected proposals to reduce public spending through rebates on drugs for low-income Medicare "dual eligibles" or by government negotiation of Medicare drug reimbursement. But limits on drug exclusivity have support, and specialty pharma will face more intense scrutiny this year.

Will inexpensive generic drugs continue to increase?

More than 80% of prescriptions in the U.S. involve generics, with the Medicare Part D program driving the trend. More will come to market faster with generic manufacturers now paying user fees to speed up the Food and Drug Administration approval process for these products. But the shift to generics may slow down, as many blockbuster drugs already have lost patent coverage.

When will biosimilars appear?

Insurers and pharmacy benefit managers are eager for less costly versions of key biotech therapies, but the first such product has yet to make it through the complex U.S. regulatory and legal framework. Many widely used biotech therapies will lose patent protection over the next few years, and dozens of small and large biopharma companies are lining up to develop comparable therapies. FDA promises further guidance on the testing needed to demonstrate biosimilarity, and agency officials will continue to meet with firms to help them establish viable product development strategies.

Is FDA blocking innovation?

FDA had approved only 26 new molecular entities as of early December 2013, much less than the near-record 39 new drugs in 2012. There's no slow-down in approvals, explained John Jenkins, director of FDA's Office of New Drugs, at the December FDA/CMS Summit; the problem is that fewer new drug applications were filed. Jenkins noted that a more transparent new drug review program is helping sponsors remedy shortcomings more quickly and rescue troubled applications.

Can personalized medicine fill pharma pipelines?

Access to genomic data and effective diagnostics will continue to spur development of therapies for small patient populations with serious conditions. Orphan drugs already account for a significant portion of new drugs approved by FDA, and that will increase as Big Pharma shows more interest in these markets. FDA will continue to encourage orphans and breakthroughs with special assistance to streamline development and approval.

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