Premier releases 9 policy recommendations

US-BASED healthcare improvement company Premier Inc has made nine recommendations designed to stimulate competitive markets for pharmaceuticals and to address the issue of skyrocketing cost of drugs.

In a statement, Premier said it believes these reforms provide a holistic approach to achieving a high-quality, cost-effective pharmaceutical industry, while correcting regulatory loopholes that impede competition and directly lead to unsustainable price increases.

The policy recommendations include speeding up the US Food and Drug Administration’s (FDA) drug approval process, eliminating pay-for-delay deals, ensuring access to biosimilars, preventing abuses of orphan drug status, cracking down on product evergreening, preventing abuse of citizens petitions and generic drug labelling.

They also include prohibiting manufacturers from misusing the risk evaluation and mitigation strategy (REMS) to limit competition, and ensuring safe, decades-old drugs are still available to consumers at reasonable prices.

By and large, skyrocketing drug costs are a result of unhealthy markets that lack competition, says Alkire

“By and large, skyrocketing drug costs are a result of unhealthy markets that lack competition,” said its COO Michael J Alkire.

“Today, monopoly players can raise prices at will — even for generic drugs — by hundreds of percentage points, creating expensive medications without true, added value. This adversely impacts providers, payers and patients. We are at a tipping point in healthcare spending, and if we are serious about reducing costs and addressing unsustainable expenses, drug prices must be part of the discussion. This is an urgent matter and we strongly urge Congress to enact our recommended policies.” Premier said a wealth of research and insights prove that competition in the pharmaceutical marketplace is a powerful antidote to rising costs.

According to the FDA, when two or more generic drug makers enter the market, prices fall to 52% of the original price, and continue to drop as more competitors enter the market, it said.

However, in too many cases, competition that brings drug prices down is lacking. In some cases, the slow FDA drug approval process inadvertently fosters monopoly markets, while competitors move through a review system that can last up to four years.

This unfair advantage, it said, provides incumbent manufacturers an opportunity to raise prices in the interim. In other cases, companies have made it a business strategy to block competition in order to preserve or raise high prices.

These market dynamics has led Premier to develop recommendations, which can be implemented in combination or as standalone reforms.

In speeding the FDA’s drug approval process, Premier said Congress should require the FDA to prioritise review of generic drug applications when there are three or fewer manufacturers in the market, and ensure decisions for these applications are made within 240 calendar days.

As for prohibiting manufacturers from misusing the REMS to limit competition, it said manufacturers have used the FDA’s REMS programme to create restrictive distribution networks that deny generic drug makers access to samples for bioequivalence studies, which are required for the drug approval process.

Premier said Congress should stop these anticompetitive practices by prohibiting manufacturers from restricting access to covered products.

On eliminating pay-for-delay deals, it said some branded manufacturers sidestep competition by offering to pay generic companies to delay or scuttle plans to bring lower-cost alternatives to market.

These anticompetitive deals, it said, cost consumers and taxpayers an estimated US$3.5 billion (RM14.95 billion) in additional drug costs every year, according to the Federal Trade Commission, and should be outlawed by Congress, as called for in the Preserve Access to Affordable Generics Act.

As for ensuring access to biosimilars, it said the ability to safely substitute biosimilars for innovative biologics will be critical to competition.

“FDA guidance should clearly explain that applications demonstrating the same clinical results as the reference product are interchangeable and granted biosimilarity status. In addition, the guidance should allow applicants to conduct interchangeability

studies using products obtained from any market, rather than limiting these studies to US licensed products that often cost much more than those from other countries,” said Premier.

In preventing abuses of orphan drug status, Premier said it creates incentives for manufacturers to develop drugs that assist in the treatment, diagnosis or prevention of rare conditions.

However, it said the designation is abused when companies apply for and win orphan drug status, only to expand its use to other indications. Congress, it said, should consider limiting orphan status to new drugs, and prohibit the designation in cases where there is a reasonable likelihood the drugs will be used beyond the orphan population.

On cracking down on product evergreening, Premier said to extend the life of a patent, some manufacturers seek new drug approval for a changed formulation of the original, such as an extended release or changed dosage version.

Once approved, the original drug is pulled from the market, leaving no opportunity to obtain samples for bioequivalence testing.

This practice, it said, should be barred, and Congress should study the evergreening practice to determine whether regulatory or legislative changes are needed to continue to advance generic drug competition.