Trump pitches changes to 180-day generic exclusivity
- The Food and Drug Administration is coming away unscathed in President Donald Trump's FY 2019 budget, with a proposed funding boost of $473 million. That compares favorably to the document's call to slash the larger Department of Health and Human Services budget by 21% from the 2017 enacted level.
- The largely political document pushes for legislation to alter how FDA treats generic drugmakers which are first to file a substantially complete drug application. The idea is to maintain the current 180-day exclusivity for first filers, but to prevent them from "parking" their exclusivity by treating a second generic application as a trigger for the first applicant's exclusivity period.
- Another proposal echos an idea from the Centers for Medicare and Medicaid Services to require Medicare Part D sponsors to pass on a certain percentage of rebates to consumers. Drugmakers, insurers and pharmacy benefit managers (PBMs) have clashed over the idea, debating whether the proposal would actually save the government money.
The administration argues its legislative proposal would allow FDA to bring more generic drugs to market by preventing bad actors that "unreasonably and indefinitely block subsequent generics from entering the market beyond the exclusivity period."
"Some 'first filers' can block subsequent generic competitors from receiving approval under this exclusivity provision," the detailed budget document states. "Similarly, first filers that receive tentative approval but then intentionally delay seeking final approval can block subsequent competitors. As a result, first filers can 'park' their exclusivity, and consumers are denied access to generic products and must keep paying brand price."
Under the budget's plan, the 180-day exclusivity clock for the first filer would be triggered when "the tentative approval of a subsequent generic drug applicant that is blocked solely by a first applicant’s 180-day exclusivity, where the first applicant has not yet received final approval." The budget contends the idea would save Medicare $1.8 billion over 10 years and lead to more affordable healthcare through increased competition.
Reactions to the budget's proposed boost in agency funds were positive. The Alliance for a Stronger FDA praised the move, saying it would help the agency hire and retain the workforce needed to carry out its responsibilities.
"This budget represents an enormous vote of confidence in FDA, a recognition that the agency is doing its job well and making a critical public health difference," said Ladd Wiley, executive director of the group, which is made up of industry and nonprofits.
The budget also proposes that Medicare Part D sponsors be required to give at least one-third of total rebates and price concessions to beneficiaries. "This will improve price transparency and allow beneficiaries to share directly in the savings from discounts negotiated by plans," the HHS budget proposal argues.
The administration contends that if implemented, the change would save $42.2 billion over 10 years.
Unsurprisingly, drugmakers love that idea. The industry has made a concerted effort to highlight other actors' role in the pricing system, targeting PBMs and other players.
"We applaud the president for proposing to give seniors in Medicare Part D access to negotiated savings at the pharmacy counter, which is an important step that would lower out-of-pocket costs and make it easier for seniors to access the medicines they need," PhRMA president and CEO Stephen Ubl said.
But the Pharmaceutical Care Management Association, which represents PBMs, argued few people would benefit from the idea and cite a government report that such a change could shift $29 billion to drugmakers.
"It would raise premiums for all seniors, help only 10 percent who take certain drugs, and do nothing to improve things for low-income seniors, who already pay no cost sharing in Part D," PCMA said in a statement.
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