Politics & Prices Dominate 2015 Agenda

Jan 09, 2015
Issue 1

The coming months will be challenging for biopharma companies, as scrutiny continues to intensify over prices of new drugs and biotech therapies, while demand escalates for more safe and effective treatments for deadly diseases at home and abroad. Patient alliances can help pharma explain the important trade-offs in risks and benefits, as drug development and marketing face these and other hurdles in the coming months:

Jill Wechsler

Political change

There's hope that Republican gains will create a more collaborative environment in Washington, and that needed legislation will be enacted before 2016 presidential electioneering puts new policy initiatives on hold. In last month's lame-duck session, Congress agreed on popular bills to speed FDA approval of sunscreen ingredients and to extend incentives for developing Ebola treatments. Rising federal revenues may make it easier to increase budgets for FDA and the National Institutes of Health, but agreement on tax reform and international trade proposals will be much harder.

Leaders of the House Energy & Commerce Committee are moving forward a bi-partisan bill to promote "21st Century Cures." The package will seek to modernize clinical research, use health information systems to track drug safety, streamline Medicare drug coverage decisions, and provide added incentives for developing antibiotics, orphan drugs, pediatric medicines and drug "repurposing." Proposals to limit FDA regulation of medical apps and clinical testing laboratories are more controversial. Committee chairman Fred Upton (R-Mich) plans to move a bill through his committee by March so the House can vote on it before Memorial Day and leave the Senate enough time to take similar action.

Pricing and costs

Congress will continue to scrutinize prescription drug prices, from protests about soaring generic drug prices to the international debate over the value of remarkably effective, but high-priced hepatitis C therapies. Insurers, payers and pharmacy benefit managers (PBMs) are looking to manage the predicted surge in "specialty" treatments for cancer and other life-threatening conditions, while pharma companies are developing more comparative effectiveness data to document product value and to combat plan efforts to tighten formularies and boost coinsurance rates. Industry will face proposals to cut drug outlays by boosting Medicaid rebates on drugs that raise prices precipitously; limiting coverage of "protected drug classes" by Medicare Part D plans; and further extending low 340b prices to more hospitals and healthcare entities.

Payers also look to new biosimilars to offset the high costs of older biotech therapies and continue to pressure FDA to smooth the regulatory pathway for these products. The agency is expected to approve the first U.S. biosimilar this year and to issue further guidance on documenting biosimilar interchangeability and on product naming and identification.

Pipelines and research productivity

Despite continued pressure on prices, biopharma R&D remains strong, as seen by more new drug approvals and treatment options. The search for a cure for Ebola demonstrates how industry can marshal its considerable resources and expertise to speed development and testing of innovative vaccines and antivirals.

At the same time, pharma R&D costs continues to soar, according to the latest analysis by the Tufts Center for the Study of Drug Development (CSDD), which puts the average total cost of developing a new drug at a whopping $2.6 billion, less opportunity cost. More research on hard-to-treat chronic and degenerative diseases drives up expenditures, as does greater payer demand for more comparative effectiveness data. But the rising number also reflects a distressing lack of progress in making biopharma R&D more efficient, as seen in still-high failure rates for experimental programs and ever longer and more complex clinical trials.

Promotional practices

FDA made progress last year in issuing guidance on marketer communications through social media and distribution of scientific materials to doctors, but the rules remain murky. The launch of the Open Payments program, which issued its first "Sunshine" report on industry payments to health professionals in September, sets the stage for more extensive and complete disclosure next year. Distribution of co-pay coupons by pharma companies has become a hot-button issue, along with presentation of economic information to formulary committees and payers. The debate will continue over whether FDA policies inhibit commercial free speech, as pharma marketers seek more flexibility in presenting "truthful" messages.

Pharmaceutical quality

Ongoing shortages of important medicines continue to roil the healthcare system and to rack up heavy penalties for industry. FDA officials advise manufacturers to invest in high-quality production systems to avoid public health crises and costly repercussions. A new Office of Pharmaceutical Quality in the Center for Drug Evaluation and Research will better coordinate premarket review and inspection of drug products, with a greater focus on risk and standards. FDA also is promulgating new rules for pharmacy compounders and for tracking drugs through the supply chain to prevent the distribution of adulterated and counterfeit medicines. Data reliability is a growing concern, and regulators will be looking closely for evidence of false and adulterated information submitted to the agency.

Let the PDUFA negotiations begin

Patients & partners

To better finance R&D, pharma companies, academic research institutions, and disease advocacy groups are pooling expertise and resources to develop specific therapies in the US and abroad. Patient-centeredness has become the governing mantra for effective drug development, as patient input supports increased investment in breakthrough drugs and added incentives for developing treatments for rare and neglected diseases. FDA is consulting with disease groups on clinical research issues, such as patient-reported outcomes, acceptance of biomarkers and surrogate endpoints, and adaptive trial designs. And collaborations seek to devise biomarkers and measures of drug efficacy, set standards for collecting and submitting data to regulatory authorities, and tackle a range of precompetitive and regulatory issues calculated to streamline research.

But drug cost and access also are concerns for patients, and disease groups are questioning high prices on specialty drugs, as well as limited reimbursement by insurers, pharmacy benefit managers (PBMs), and public health programs. Compassionate use requests continues to pit FDA and biopharma companies against desperate patients and families, as very ill individuals demand early access to experimental therapies that hold any promise, and sponsors and regulators—and disease groups—seek to maintain a viable R&D process.

Jill Wechsler is Pharmaceutical Executive's Washington correspondent. She can be reached at [email protected].

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