Drug importing. HHS' decision to allow import of GSK's German-made flu vaccine prompted demands for the administration to permit broad drug
importing by local governments and individuals. Senate Democrats threaten to block confirmation of a new HHS secretary or
FDA commissioner until Republicans allow a vote on importation (See "Capitol Hill Insider to Lead Industry,"). An administration
task force report on the subject, which was published in late December, will be a starting point for further debate.
Push for generics. The Bush administration has supported generic drugs as a way to reduce costs for patients and payers without direct price
controls. Now the debate is escalating over policies that could facilitate production of generic versions of biotech therapies.
FDA held a public meeting on follow-on proteins in September and is co-sponsoring a workshop on related scientific issues
in February. Brand-name manufacturers maintain that full pre-clinical and clinical testing is needed to ensure that a "follow-on
biologic" (FOB) is equivalent to an innovator biotech therapy; generic firms say advanced analytical and manufacturing systems
permit an abbreviated testing process. Both sides are gearing up for a stiff fight.
Going global. The administration is under pressure to boost support for international efforts to combat AIDS in third-world nations. Cloning
and stem cell research are drawing international scrutiny. A host of ethical and regulatory issues are emerging as more clinical
trials move to newly industrialized and developing nations, where costs are lower and participants are more available. These
developments challenge drug intellectual property protections and raise questions about the developing world's access to needed
FDA will continue to harmonize new drug development and regulatory oversight by different nations this year with a focus on
setting global quality manufacturing standards. These activities are slated to maintain interest in international drug price
differentials and on whether the US market should underwrite biomedical research for the rest of the world.
New offices, new names. An early task for the new HHS secretary will be to name a permanent head of FDA, which has been led by an acting commissioner
for much of Bush's tenure. An even more dramatic change is expected this spring when the Center of Drug Evaluation and Research
relocates most new-drug reviewers to its new White Oak campus. The move will be accompanied by several organizational and
program changes, along with new approaches to reviewing applications and postapproval monitoring.
Medicare Update Final regulations for the Medicare pharmacy benefit are due out this month. But the Centers for Medicare and Medicaid Services
(CMS) has already completed one critical element: its plan for dividing the nation into regions for prescription drug plans
(PDPs) to offer Rx coverage to seniors. Large pharmacy benefit managers (PBMs) had lobbied for broad regions that would increase
their leverage in negotiating discounts from manufacturers. But HHS decided on 34 regions, small enough so that PDPs won't
bite off more than they can chew in signing up seniors and providing services by the January 2006 start-up.
Each region has enough eligible beneficiaries to support at least two PDPs, according to CMS calculations, and drug spending
levels are fairly similar in each region: Arkansas was split off from Louisiana in the final plan, for example, because of
big differences in individual drug consumption. All regions include at least one state, and most are similar to the 26 regions
established for insurers and HMOs to offer regional PPO (preferred provider organization) plans. PBMs that want more negotiating
clout with pharma can bid to offer coverage in multiple regions, CMS suggests.
In evaluating PDP programs, CMS says it will examine the structure and operations of pharmacy and therapeutics (P&T) committees,
the formulary list, and benefit management tools, such as prior authorization and appeals and exceptions policies. A draft
guidance in December said plans may follow the US Pharmacopeia model formulary, but notes that CMS will still evaluate formularies'
classification system and drug lists and may require more than two drugs per class in some situations to ensure that the plan
can adequately treat all critical diseases.
Jill Wechsler is Pharmaceutical Executive's Washington correspondent.