- Food and Drug Administration Commissioner Scott Gottlieb took aim at a broad swath of the healthcare industry Wednesday, lambasting pharmacy benefit managers, insurers and branded drugmakers for allegedly blocking biosimiliars' ability to enter the market, calling efforts between payers and third parties "pernicious" and dubbing them "Kabuki drug-pricing constructs."
- The agency chief pointed to so-called pay-for-delay deals, where pharmas pay generics to hold off competition as a barrier to lower costs.
- He also chided PBMs, distributors, and drug stores for teaming up with payers. "They use their individual market power to effectively split some of the monopoly rents with large manufacturers and other intermediaries rather than passing on the saving garnered from competition to patients and employers," Gottlieb said.
While the FDA typically stays mum on drug pricing, Gottlieb has argued the agency has a role to play by speeding generic drugs to market. The commissioner didn't mince words in criticizing the players across the healthcare ecosystem, pointing to high out-of-pocket costs for patients he argued simply subsidize rebates to PBMs and premium costs for the healthy.
"After all, what's the point of a big co-pay on a costly cancer drug? Is a patient really in a position to make an economically-based decision? Is the co-pay going to discourage overutilization? Is someone in this situation voluntarily seeking chemo? Of course not," Gottlieb said, speaking at the insurer trade group AHIP's conference in Washington.
"We're living in a world where financial toxicity is a real concern for patients. And every member of the drug supply chain needs to take responsibility for addressing it," Gottlieb said.
The Pharmaceutical Care Management Association and AHIP both deflected blame, throwing responsibility back to branded drugmakers that set list price for drugs.
"It's unfair to blame payers — who pay 2/3 the cost of drug benefits — for seeking the lowest costs in a marketplace where they have no control over the prices drugmakers set, how quickly FDA approves biosimilars, or when FDA will finalize workable interchangeability guidelines to increase uptake of biosimilars," PCMA said in a statement.
The availability of biosimilars, or copycat biologics, could save the U.S. healthcare system as much as $150 billion over the next 10 years, said one recent report. But access to these cost-saving medicines has been difficult.
Gottlieb said market dynamics are working against entrance of biosimilars. Since 2015, the FDA has approved nine biosimilars, including two for cancer treatments, but only three of those products have actually gotten to patients.
Often, patent litigation or even deals between manufacturers can keep biosimilars from competing. In September 2017, for instance, AbbVie Inc., the maker of the blockbuster rheumatoid arthritis drug Humira (adalimumab), reached an agreement with Amgen Inc. to keep the big biotech's copycat of the drug off the market in the U.S. until January 2023. Now that no biosimilars will stand in its way, sales of Humira are now expected to top $21 billion annually in 2020.
But not all drug manufacturers are playing the system in this way.
Pfizer Inc. is one of the few companies that has brought a biosimilar to market. In a rare instance, Pfizer is actually the 'David' to Johnson & Johnson's 'Goliath' — or in this case, Remicade (infliximab). Pfizer's Remicade biosimilar Inflectra has been struggling to gain market share despite its a modest discount, and Pfizer hasn't been quiet about its displeasure.
The New York-based big pharma is battling it out with rival J&J in court, accusing the multinational conglomerate of securing contracts that promote anti-competitive practices.
"The promise of biosimilars to help reduce healthcare costs and provide patients access to important medicines is being stymied by anti-competitive barriers such as those established by J&J within insurance companies that have prevented inclusion of biosimilars on formulary and in medical benefit policies," Pfizer said in a statement to BioPharma Dive. "Until this practice is addressed, the U.S. government at the state and federal levels, as well as many employers, patients and physicians across the country will continue to pay more for biologics, even when a biosimilar is available."
But it might not all be for naught; in June 2017, the Supreme Court unanimously decided that a biosimilar drug developer would not have to wait until receiving approval from the FDA to provide branded drugmakers a mandated 180-day notice of commercial marketing.
The ruling would allow biosimilar makers to launch a product immediately following approval from the FDA provided no patents block entry — similar to the current generic drug system.
Gottlieb's speech at the America's Health Insurance Plans' National Health Policy Conference follows HHS Secretary Alex Azar's remarks to the Federation of American Hospitals Monday and CMS Administrator Seema Verma 's talk to HIMSS Tuesday.