ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PharmaceuticalPricing
AaronS.Kesselheim,M.D.,J.D.,M.P.H.Professor,HarvardMedicalSchool
Director,ProgramOnRegulation,Therapeutics,AndLaw(PORTAL)[email protected]
September,2019
PORTAL Program On Regulation, Therapeutics, And Law
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law
Disclosures• NooneinourDivisionhaspersonalfinancialrelationshipswith
anypharmaceuticalcompany
• CurrentresearchfundingfromArnoldVentures,Harvard-MITCenterforRegulatoryScience,AnthemPublicPolicyInstitute,OpenSocietyInstitute,EngelbergFoundation– Pastresearchfunding(<3yrs)fromFDAOfficeofGenericDrugsandDivof
HealthComm,GreenwallFoundation,CommonwealthFund
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law
MOOCWeek1:TheFDA—itshistory,publichealthrole,andhowitmakestherulesaffectingtheUSprescriptiondrugmarket(specialguest:PeggyHamburg)Week2:Theprocessofdiscovering,testing,andapprovinginnovativedrugs(specialfeature:mockAdvisoryCommittee)Week3:Thecostofprescriptiondrugs,includingthefactorsaffectingadrug’smarketexclusivityperiodandtheavailabilityanduseofinexpensivegenericdrugs(specialguest:DavidMitchell)Week4:Thepromotionofprescriptiondrugsbypharmaceuticalmanufacturerstophysicians(e.g.,viasalesrepresentatives)andpatients(e.g.,viadirect-to-consumeradvertising)(specialguests:SteveWoloshinandLisaSchwartz;LeezaOsipenko,NICE;ShahramAhari)Week5:Post-approvalevaluationofprescriptiondrugs(specialguests:GeralDalPan,FDA;RichardPlatt,Sentinel)Week6:CurrentdebatesoverthescopeofFDAregulation:Dietarysupplements;stemcelltherapies;FDAregulationofemergingtechnologies(specialguest:DanCarpenter)
Click here to view trailer
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law
Policydilemma• Drugsareamongthemosteffectiveandcost-effectiveinterventionsinmedicine
• Drugindustryplaysimportantroleinbringingproductsforward,whichcanrequiresubstantialresources
HOWEVER…• DrugpricesintheUScontinuetorise,whichcanmakebreakthroughsunaffordableformanyofourpatients– Badclinicalconsequences– DriverofUShealthcarespending
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law
PrescriptionDrugSpendingintheUS• Sales:$456billionin2017
– 22%ofhealthcarespending(IMS)– 19%ofMedicarespending(MEDPAC)– 19%ofemployer-basedinsurancebenefits(Kaiser)
• Internationalpercapitacomparisons– US:$858;avg19industrializedcountries:$400
-OECD(2015)Schumocketal,AJHP2018;Kesselheimetal,JAMA2017
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law
Brand-NameDrugs• 10%prescriptions,72%ofspending• 164%increaseinpricefrom2008-2015ofmostcommonlyusedbrand-namedrugs– 12%increaseinCPI,28%increaseinaggregatehealthcarespending
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law
Notlimitedtobrand-namedrugs
• Among>21,000genericproducts(2008-2015),400(2%)increasedmorethan1,000%
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law
Clinicalconsequences• MorepatientshavecoverageduetoMedicaredrugbenefitandACA,cost-containmentstrategieshaveshifteddrugexpensesontopatients’shoulders– Medicaidprogramsfacinghigherdrugcostshavehadtocutbackonotherservicesorhavetightenedeligibilityrequirements
• 25%ofpatientsin2016reportedthattheyoranotherfamilymemberdidnotfillaprescriptioninthelastyearduetocost
• Patientsprescribedacostlybrandedproductratherthanamoreaffordablegenericalternativeadherelesswell,andhaveworsehealthoutcomes
Shranketal,ArchivesIntMed2006;Gagneetal,AnnalsofIntMed,2014;DiJulioetal.,KaiserFamilyFoundation
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law
Explanations• 1.“Highpricesdriveinnovation”
– …butinnovationthatleadstotransformativenewdrugproductsisoftenperformedinacademicinstitutionsandsupportedbypublicinvestmentsuchastheNationalInstitutesofHealth
– …butproportionoflargepharmaceuticalcompanyrevenuesthatgoestoR&Dis10-15%
Kesselheimetal.,HealthAffairs,2015
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law
Evensmallerifonlyinnovativeproductdevelopmentisconsidered“Oneofthegreatmythsoftheindustry”thatitcosts$1Btodevelopadrug
(CEOGlaxoSmithKline,2014)
Kesselheimetal.,JAMA,2016
SalesandR&Dexpendituresof10largestdrugmanufacturersin2014
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law
Explanations
• 1.Highpricesdriveinnovation• 2.It’stheFDA’sfault
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law
MeetingFDA’sever-more-tolerantefficacystandard
• 1/3newdrugsapprovedonthebasisofasinglepivotaltrial• 2/3approvedbasedonstudieslasting6mosorshorter• 1/2approvedbasedonsurrogatemeasures(vsactual
clinicalendpoints)• Averagenumberofpatientsstudiedtobringnewdrugto
market– 1998-2001:>5,000– 2000-2010:1,377
• 1,708(IQR:968-3,195)fornon-orphan-designateddrugs• 438(IQR:132-915)fororphan-designateddrugs
Downingetal.,JAMA2015;TuftsCenterfortheStudyofDrugDevelopment,2002;Duijnhovenetal.,PLoSMedicine,2013
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law Robertsetal.,HealthAffairs,2011,Downingetal.,NEJM,2012
FDAspeed
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
>2/3ofnewdrugsapprovedviaexpeditedpathwayin2017
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law
Explanations
• 1.“Highpricesdriveinnovation”• 2.“It’stheFDA’sfault”• 3.“Highpricesreflectvalue”
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law
Fixed-dosecomboscovering7therapeuticareasCardiovascularExforge=amlodipine+valsartanDiovanHCT=valsartan+HCTZBidil=isosorbidedinit+hydralazineEdarbyclor=Azilsartan+chlorthalidoneExforgeHCT=amlodipine+valsartan+HCTZMicardisHCT=telmisartan+HCTZLotrel=amlodipine+benazeprilHyzaar=losartan+HCTZTarka=trandolapril+verapamilCaduet=amlodipine+atorvastatinAvalide=irbesartan+HCTZSimcor=niacin+simvastatinAdvicor=niacin+lovastatinBenicarHCT=olmesartan+HCTZAzor=olmesartan+amlodipineTribenzor=olmesartan+amlodipine+HCTZ
PainVimovo=naproxen+esomeprazoleDuexis=ibuprofen+famotidineArthrotec75=diclofenac+misoprostolNorco=hydrocodone+acetaminophenVicodin=hydrocodone+acetaminophenVicodinES=hydrocodone+acetaminophenVicodinHP=hydrocodone+acetaminophenPercocet=oxycodone+acetaminophen
EndocrineActoplusMET=pioglitazone+metforminFosamaxPlusD=alendronate+VitD3
AntibioticPylera=bismuth+MNZ+tetracycline
GastrointestinalZegerid=omeprazole+sodiumbicarb
NeuroNuedexta=dextromethorphan+quinidineStalevo100/150=carbidopa/levodopa/entacaponeNamzaric=memantine+donepezilTreximet=sumatriptan+naproxen
UrologicJalyn=dutasteride+tamsulosin
Sacks,Lee,Kesselheim,Avorn,JAMA2018
>600,000Medicarebeneficiariesin2015~$825millioninexcessspendingin2015inMedicarealone
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law
ICERValue-BasedPricingin2017Drug ListedPrice ICERValue-
basedPriceDifference(%)
Sacubitril/valsartan(Entresto)
$4,560/yr $4,168 9%
PCSK9Inhibitors
alirocumab:$14,600/yrevolocumab:$14,100/yr
$2,177 85%
Carfilzomib(Kyprolis)
$1,862/unit $673 64%
Ixazomib(Ninlaro) $2,190/unit $181 94%
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law
Explanations
• 1.“Highpricesdriveinnovation”• 2.“It’stheFDA’sfault”• 3.“Highpricesreflectvalue”• It’sbecauseweallowpharmaceuticalcompaniestochargewhateverthemarketwillbear,andatthesametimepermitstrategiesthatundercutcompetitionorhinderpayors’abilitiestoprovidecounterweightsthatmightreducehighprices
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law
Whatcanwedoaboutit?
• Acombinationofdifferentissues• 4majorperiods
– Preapproval– Marketexclusivityperiod– Transitiontogenericdrugs– Multisourceproductionperiod
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law
Period1:Brand-namemarketexclusivity
• Allnewdrugsguaranteed~6-7yearsofmarketexclusivity–nocompetition– Newantibioticsget11-12years– Biologicsget12years
• Drugsprotectedbypatentslasting20years• Medianmarketexclusivityforsmall-molecule(non-biologic)drugsis12.5years– 14.5yearsforfirst-in-classproducts
Wang,Liu,Kesselheim,JAMAIM,2015
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law
Limitsonpublicpayors…• FDAdoesnotregulatedrugpricesoranyeconomicsoftheindustry• Medicare(45M,29%ofnation’sdrugexpenditure)cannotusea
nationalformularyornegotiatedrugprices– 6protecteddrugclasses
• Medicaid(75M)cannotexcludemostFDAapproveddrugsfromcoverage– Getsautomaticrebate;individualstatescannegotiatesupplemental
rebates• VAcanuseformularyexclusionstonegotiatedirectlywith
manufacturers– Initialprices40%belowthosepaidbyMedicarePartDplans– VApriceexcludedfromMedicaidrebatecalculation
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law
…andprivateinsurers,too• ~200millionpeople• Annualdeductibles,co-payments,co-insurance(“out-of-pocket”costs)
• Formularies,administeredbypharmacybenefitmanagers
• BUT…lackofcomparativeeffectivenessinformationatthetimeofapproval
• Sampleof197drugsapproved2000-2010:51%hadCEinfoattimeofapproval,including33%ofdrugsforwhichothertreatmentoptionsexisted
– Statelawsrequiringcoverageofcertainprotecteddrugs• NCSL2009:36/50statesrequirecoverageofoff-labeluseofcancerdrugs
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law
CouponsandPatientAssistancePrograms
RossandKesselheim,NEJM,2013
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PBMs… goodorbad?
• Aggressivepricenegotiationisnotthenorm(feescanbebasedongivenpayer’sspendingondrugs)
• Leadtoincreasesin“listprices”
• Negotiaterebatesfrommfrs,discountsfromretailers
• Encourageuseofgenericsandcheaperbrands
• Patienceadherence,reducewaste
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law
Solutions:Medicarenegotiation• Competitivelicensing(HR1046)
– MedicarePartDpricenegotiation,takingintoaccount:• Comparativeclinicalandcost-effectiveness• Budgetaryimpactofprovidingcoverage• Unmetneed• Globalsalesrevenue
– Ifunabletosuccessfullynegotiate…“Secretaryshallauthorizetheuseofanypatent,clinicaltrialdata,orotherexclusivitygrantedbytheFederalgovernmentwithrespecttosuchdrugastheSecretarydeterminesappropriateforpurposesofmanufacturingsuchdrugforsaleunderaprescriptiondrugplanorMA–PDplan.Anyentitymakinguseofacompetitivelicensetousepatent,clinicaltrialdata,orotherexclusivityunderthissectionshallprovidetothemanufacturerholdingsuchexclusivityreasonablecompensation
• Mandatoryarbitration
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law
OtherProposals• InternationalPricingIndex(ANPRM,fall2018)
– PartBdrugpricescomparabletoothereconomicallysimilarcountries(2020-2025)
– Allowprivate-sectorvendorstonegotiatepricesfordrugs• EliminatingtherequirementthatMedicarecoverallFDA-approvedproductsin6drugclasses(Blueprint)
• EliminateMedicaidrebatecap(Blueprint)– ~$100millioninforegonesavingsin2017
• Eliminatecertaindrugrebatesbyrevokinganti-kickbackstatutesafeharborforrebatespaidbydrugmfrstoPBMs,PDPs,andMedicaidMCPs(Jan2019)
SeeSarpatwariandKesselheimJAMA2019;SarpatwariAvornKesselheimJAMA2018
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law
Otherideas
• Inflation-basedrebatesinPartB– CBOestimate$1.5Bsavingsfrom2019-2028
• Shiftdual-eligiblepatientsbackfromMedicaretoMedicaid– CBOestimate$150Bsavingsfrom2019-2028
• ShiftPartBdrugstoPartD
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019STRICTLY CONFIDENTIAL
Part B to Part D shift Rx prices were >46% lower in other high-income countries
See Hwang TJ, Jain N, Lauffenburger JC, et al. Analysis of Proposed Medicare Part B to Part D Shift With Associated Changes in Total Spending and Patient Cost-Sharing for Prescription Drugs. JAMA Intern Med 2019. [Epub ahead of print]
International Price Comparison for Part B Drugs
• Foreign prices were available for 69 drugs (out of 75 total in study cohort)
• Drug prices in high-income countries were 46-60% lower than those in Part B
• US to foreign price ratio was 1.7-2.2x (consistent with ASPE’s est. of 1.8x based on sample of 25 drugs)
Insurers (passive) Gov’t Insurers Gov’t;
insurers Gov’t Primary negotiator
0.0
0.2
0.4
0.6
0.8
1.0
Fore
ign
to U
S Pr
ice
Rat
ios
(US
ASP
= 1
)
Median Weighted Average
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
“Outcomes-BasedContracts”?
Advantages• Opportunitytopayfordrugsonlyinpatientsinwhich“appeartowork”
Limitations• Outcomesmeasurementlimitations(short-term,observableinclaimsdata,surrogates)
• Canaccountforinprice-setting
• Costlytoimplement• Unclearapplicationtopatientout-of-pocketcosts
SeeleyandKesselheim,CommonwealthFundIssueBrief,2017
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law
Moreextremesolutions• UsecurrentpathwaysforUSgovernmenttointerveneforessentialpatent-protectedmedicines– Ex.:Section1498“governmentpatentuse”forareasonableroyalty(ex:ciprofloxacin/anthrax)
– “March-inrights”
Kapczynski and Kesselheim, Health Affairs, 2016; Treasure, Avorn,Kesselheim,JAMA2016
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law
Stateinterventions• Medicaidformulary1115waiver–triedbyMassachusetts,blockedbyCMS
• DrugpricegouginglawinMD–blockedbyfederalcourt• CaliforniaAB-265–preventdrugcouponusewhengenericavailable
• Transparencylaws(VT,NV,CA,OR,CT,ME)• NY:DOHauthorizedtoidentifyandreferhigh-costdrugstoadrugutilizationreviewboardforadeterminationofatargetrebateamount(2017)– ImplementedinMassachusettsin2019
• LouisianahepCdrugpurchase
SeeSommersandKesselheim,NEJM2018;Hwang,Kesselheim,Sarpatwari,JAMA2017;Greene,NEJM2017
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law
Physician/patient-levelinterventions• Re-evaluatewidespreaduseofdrugcoupons,DTCA,freesamples– MandatedisclosureofpricesinDTCA(Blueprint)
• Integratingvalue-basedprescribingintophysicians’professionaleducationorthroughelectronicmedicalrecordpoint-of-carereminders
• AccountableCareOrganizationscanprovideanopportunitytopairhealthservicescostsanddrugcostssothatphysiciansbenefitfromprescribingdrugsoptimallyratherthanfromprescribingdrugsthatdonotaddvalue
• Produceandactivelydisseminatebetterinformationabouttheclinicalandeconomicvalueofdrugs
Kesselheimetal.,JAMA,2016
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law
Academicdetailing• Goal:Toclosethegapbetween:
• thebestavailableevidence• actualclinicalpractice
• …sothatclinicaldecisionsarebasedonlyonthemostcurrentandaccurateevidenceon:• Efficacy• Safety• Cost-effectiveness
• Oftensupportedbyapublichealthagencyoranon-profithealthcaresystemlikeKaiserthatisinterestedinimprovingclinicaloutcomes
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law
Period2:Brand-to-generictransition• Genericdrugsaretheonlytypeofcompetitionthatconsistentlyandsubstantiallylowersprescriptiondrugprices– Emergeaftermarketexclusivityperiodends(lawsuitsinitiatedbygenericdrugmanufacturer)
– AbbreviatedFDAapprovalprocess,stateDrugProductSelectionlawsfacilitateautomaticsubstitution
• Barrierstogenericdrugentry– Patenttermrestoration,pediatricexclusivityextension– Pay-for-delaysettlementsoflawsuits– “Lifecyclemanagement”
• Secondarypatenting• Producthopping
Kesselheimetal,JAMAIM,2017;Vokingeretal,JAMAIM,2017
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law
Secondarypatenting
AminandKesselheim,HealthAffairs,2013
• Lopinavir/Ritonavir– 2patentscoveringactiveingredients– 49patentscoveringdifferentcompositions/formulations– 22patentscoveringdifferentintermediatecompounds– 4patentscoveringdifferentpolymorphs– 6patentscoveringdifferentprodrugs– 31patentscoveringdifferentmethodsoftreatmentofHIVandotherdiseases
• Potentialtoextendmarketexclusivityby12yearsormore
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law CapatiandKesselheim,JMCP,2015
Producthopping• 2003:FDAapprovesmemantine(Forest)• 2010:FDAapprovesmemantineXR(Forest)• 2013:ForestlaunchesmemantineXR• Feb2014:ForestannouncesanticipatedAugustdiscontinuationofmemantine
• July2015:Expirationofmemantinepatentterm,anticipatedgenericlaunch
• 2029:ExpirationofmemantineXRpatents
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law
“Tertiary”patents
Beall&Kesselheim,NatureBiotechnology,2018
• Drugdeliverydevices– Inhalers,injectorpens,patches
• 2000:42drug-devicecomboproducts,85associatedpatents(34%tertiary)
• 2016:127drug-devicecomboproducts,844patents(57%tertiary)
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019(Provisionalapp)
Patentappfiled
YEAR
-1
Patentissues
INDapproved
NDAfiled
MarketexclusivitytermNDAapproved
MarketExclusivityPeriod
Genericentry?
0 3 6 9 12 15 18 21 24 27
HWAExcl PTR
OrphanDrugAct
“Later-issued”(OrangeBook-listed)patents
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019(Provisionalapp)
Patentappfiled
YEAR
-1
Patentissues
INDapproved
NDAfiled
MarketexclusivitytermNDAapproved
MarketExclusivityPeriod
0 3 6 9 12 15 18 21 24 27
HWAExcl PTR
OrphanDrugAct
“Later-issued”(OrangeBook-listed)patents
Genericentry!
ParaIVchallenge
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law
Otherstrategies• Restrictionsondrugdistribution
– 150inquiriestoFDAfromgenericmanufacturersunabletoobtainsamples
• Citizenspetitions– 2011-2015:124CPsrelatingtogenericapplications,87%frombrand-namemanufacturers(92%ultimatelydenied)
• Vancocintablets:24CPsfrom2006-2012
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law CapatiandKesselheim,JMCP,2015
Solutions• CREATESAct
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law
CREATES(HR965)• AneligibleproductdevelopermaybringacivilactionagainstthelicenseholderforacoveredproductseekingreliefunderthissubsectioninanappropriatedistrictcourtoftheUnitedStatesallegingthatthelicenseholderhasdeclinedtoprovidesufficientquantitiesofthecoveredproducttotheeligibleproductdeveloperoncommerciallyreasonable,market-basedterms– IfsubjecttoREMS/ETASUthenneedsformalcoveredproductauthorityfromSecretaryofHHS
– Defenseifnotmanufacturingornoinventory– Courtwillawardfines
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law CapatiandKesselheim,JMCP,2015
Solutions• CREATESAct
• PatentTrialandAppealsBoardtore-examinegrantedpatentsbeforelitigation
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law
PatentTrialandAppealsBoard• 2011AmericaInventsAct
– Thereis“agrowingsensethatquestionablepatentsaretooeasilyobtainedandaretoodifficulttochallenge.”
• Administrativebodyallowinganypartytochallengevalidityofpatentedclaims– Patentrelatingtotheanestheticagentpropofol(Diprivan),butonethatcoverstherubberstopperusedinthedrug’sholdingcontainer,notthedrugitself
• Advantages:1. StartswithPTAB,notexaminer2. PTABmustdecidewithin12months3. Allowsforlimited“discovery”(esp.depositions)4. BothpartiescanappealtoFed.Cir.5. Lesscostly($500Kvs$5.5M)
Source: H.R. Rep. No. 112-98(I) (2011) (House of Representatives Report).
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law 47
DisappointingApplicationtoDrugPatents
Darrow,Beall,Kesselheim,AppliedHealthEconomicsandHealthPolicy,2018
• 274(76%)filedbygenericdrugmanufacturers• Among89FWDs,38(43%)hadallpetitionedclaimsinvalidated,44
(49%)hadnoneinvalidated,and7(8%)hadsomeinvalidated– Relatedto25OB-listedpatents:2activeingredient,7formulation,and16other(inclmethodsofuse)
• 38decisionswithallinvalidatedassociatedwith18drugs,9ofwhichhadothernon-institutedpetitionsand7hadotherOB-listedpatents
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law CapatiandKesselheim,JMCP,2015
Solutions• CREATESAct
• PatentTrialandAppealsBoardtore-examinegrantedpatentsbeforelitigation
• ChangerulesrelatedtoCPs
• Blockpay-for-delaydeals
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law
ProtectingConsumerAccesstoGenerics(HR1499)
• UnlawfulforanNDAorBLAholderandasubsequentfilertoenterinto,orcarryout,anagreementresolvingorsettlingacoveredpatentinfringementclaimonafinalorinterimbasisifundersuchagreement—(1)asubsequentfilerdirectlyorindirectlyreceivesfromsuchholderanythingofvalue,includinganexclusivelicense;and(2)thesubsequentfileragreestolimitorforegoresearchon,ordevelopment,manufacturing,marketing,orsales,foranyperiodoftime– Exceptifthevalueiscompensationforothergoods/servicesthatthesubsequentfilerhaspromisedtoprovide
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law
Moreideas• OrangeBookreform
– Nodevices– Removalofpatentrelatingtoolderformulations
• PurpleBookreform– Listpatentinformation
• 180-dayexclusivitychanges(FAIRAct,BLOCKINGAct)
SeeSommersandKesselheim,NEJM2018;Hwang,Kesselheim,Sarpatwari,JAMA2017;Greene,NEJM2017
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law
Period3:GenericCompetition
Dave,Hartzema,Kesselheim,NEJM,2017
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law
Lackofvibrantgenericdrugmarket
Gupta,Kesselheim,etal.,JAMAIM,2016
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law
Solutions• Importgenericsfromwell-regulatedmarkets
– Whenpricespikesareequivalentto‘shortages’
Fralick,Avorn,Kesselheim,NEJM2017
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law
Importation?• FDAalreadyexercisesenforcementdiscretiontorespondtoshortages
• 2003MedicareModernizationActauthorizedimportfromCanadaifHHSSecretarycertifieddrugsassafe
• 2012FDASafetyandInnovationActgavetheFDAauthoritytoenterintoagreementstorecognizedruginspectionsconductedbyforeignregulatoryauthoritiesiftheFDAdeterminedthoseauthoritiesarecapableofconductinginspectionsthatmetUSrequirements
EngelbergAvornKesselheim,HealthAffBlog,2016
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law
AffordableandSafePrescriptionDrugImportationAct
• Canadianpharmaciesandwholesaledistributorscanbecome“certifiedforeign”sellersbypayingauserfeeand:
– BeinginCanada– Beingadistributorofprescriptiondrugsofferedforimportation– Beingestablishedfor5yearsormore– Providingmedicationsonlyifthereisavalidprescription– BeingincompliancewithapplicableCanadianlawsandregulations– Conductingregularqualityassurance– Allowingregularlaboratorytesting– Notifyingallpartiesofproductrecalls– Havingaprocessforresolvingruleviolations– NotsellingproductsthatareillegalinCanada– MeetingadditionalcriteriaimplementedbytheHealthandHumanServicessecretary
• GAOstudyofoutcomesafter18mos,expandtoincludeotherOECDcountriesafter2years
Fralick,Avorn,Kesselheim,NEJM,2017
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law
Practical?
BollykyandKesselheim,BrookingsInstitution,2017
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law
Solutions• Importgenericsfromwell-regulatedmarkets
– Whenpricespikesareequivalentto‘shortages’
• Applyregulatoryattention– FundgenericdrugscienceandFDAOfficeofGenericDrugs
– Expeditereviewofgenericapplicationswhenthreeorfewerdrugsinthemarket
• Follow-onbiologics
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law
Commonperceptions• Betterpricingmechanismswillundercutinnovation– Innovationisoftenperformedinacademicinstitutionsandsupported
bypublicinvestmentsuchastheNationalInstitutesofHealth– Lossofmarketexclusivityprotectionwasthe“mostimportant
predictor”ofthearrivalofanewproductandthenumberofnewproductintroductions
– Brand-namepharmaceuticalmanufacturers~22%profitsin2015;restofFortune500~7%
• Betterpricingispoliticallyimpossible– 72%ofAmericansfeelthatdrugcostsareunreasonableand74%feel
drugcompaniesputprofitsbeforepeople(Aug2015KFFpoll)
Kesselheimetal.,HealthAffairs,2015;GrahamandHiggins,SSRN,2007;Carrier,WiscLawRev,2012;Stiglitz,DukeLawJ,2008
ForIn-ClassUseOnly–NortheasternLawSchool–DoNotCirculateorCite--@akesselheim2019
PORTAL
Program On Regulation,
Therapeutics, And Law
Summarypoints
• Prescriptiondrugscanbetransformativeandtakesubstantialtimeandresourcestodevelop,butincreasingcostsforpatientsandsystem
• Drugspricessetbymanufacturerathighlevelsduetolackofeffective“competition”inmarketduetomarketexclusivities,restrictionsonpayors
• Justbecauseadrugisgenericdoesnotmeanit’sinexpensive