Lukewarm reception to FDA biosimilar plan Presented by the Partnership for America's Health Care Future

LUKEWARM RECEPTION TO FDA’S BIOSIMILAR PLAN — Reaction to the FDA’s recently released biosimilar plan is coming in — most of it tepid so far. FDA Commissioner Scott Gottlieb unveiled a wide-ranging, 11-point plan to promote biosimilars earlier this month. Yet approving biosimilars is half the battle in the U.S. market, where FDA lacks full jurisdiction — the rest coming under the FTC and other agencies.

FDA’s plan includes several proposals to speed up approvals and lower barriers for manufacturers to carry out interchangeability studies.

But it has drawn limited support. Leemore Dafny, an economist at Harvard Business School who formerly worked on health care and antitrust issues at the FTC, said Gottlieb could have called for more changes to FDA’s process for approving an interchangeable biosimilar. FDA’s current draft guidance poses such a high hurdle that most brand biologics would be unable to prove two batches of their product were interchangeable, she said.

“Holding the would-be rival to standards that are tougher than you hold the innovator seems like a way to prevent us from getting the benefits of biosimilar competition,” Dafny said at a Brookings Institution event this month where Gottlieb formally released his biosimilar plan.

A public hearing is scheduled for Sept. 4, making it unlikely that branded drugmakers will feel any pressure this year, several analysts said.

“The bottom line is that while the FDA has now approved 13 biosimilars, most have not come to market due to IP issues and those aren't likely to be overcome in the near term,” Cowen analyst Rick Weissenstein wrote in a note.

The FDA can’t address the “thicket” of patents blocking some biosimilars from market or provide payment policy incentives to switch patients like CMS can. That puts Gottlieb in a “challenging position,” Arti Rai, co-director of Duke University Law School's Center for Innovation Policy, said at Brookings.

Rai said the FTC needs to “really look under the hood” of some patent settlements that branded companies have negotiated with would-be biosimilar rivals — like AbbVie’s agreements staving off competition for Humira, the world’s top-selling medicine.

Happy Monday and welcome back to Prescription PULSE, where we note a new documentary on the medical device industry, "The Bleeding Edge," was released Friday on Netflix. We’ve seen it — and would like to know what you think. (Some companies featured in the film are already pushing back, Reuters reported Friday.) Send your thoughts and news tips to Sarah Karlin-Smith ([email protected] or @sarahkarlin) and Sarah Owermohle ([email protected] or @owermohle).

SPEAKING OF ABBVIE … Even though a key patent for Humira’s main ingredient expired nearly two years ago, at least 100 others encircle the company's golden goose. So while two copycat versions of the autoimmune drug have FDA approval, neither is on the market and likely won’t be until at least 2022. (By comparison: Four biosimilars are expected to launch in Europe later this year.) Even when rivals become available in the United States, a maze of patents will still protect various corners of Humira’s market — AbbVie has patents on several disease areas and manufacturing details at least through 2030, Chairman and CEO Rick Gonzalez said on the company’s earnings call Friday.

“There’s nothing inappropriate about protecting that investment in innovation. In fact, I’d say it’s a hallmark of society here in the U.S., being able to protect your IP through the system,” Gonzalez said.

Not everyone agrees. Most of the patents blocking biosimilars from coming to market are not the primary patents on the drug compound — these have long expired. The country may need to consider making it harder to get the kind of secondary patents that are impeding competition, Rai said at the Brookings event.

“Patents, at least in theory, are supposed to show you how to make and use the invention. None of the patents that biologics originators file really do that in any meaningful way,” Rai said. And once they’re granted, it’s hard for biosimilar companies to invalidate them.

SENATE MAY VOTE THIS WEEK ON DRUG PRICES IN ADS — The Senate could vote as early as this week on whether to require drug companies to list the cost of their drugs in direct-to-consumer advertisements. Sens. Dick Durbin (D-Ill.) and Chuck Grassley (R-Iowa) have offered two amendments to the “minibus” appropriations package for fiscal year 2019, H.R. 6147 (115), that is currently on the Senate floor. One would give FDA the authority to require disclosure of drug pricing information in advertisements. The other would give FDA $1 million to issue a regulation implementing the requirement.

Amendments on the appropriations bill, which includes FDA’s funding, are due Monday — meaning the Senate will likely vote on final passage of the bill by Tuesday at the earliest.

An FDA evaluation of the potential for including list prices in consumer ads is part of President Donald Trump's drug-pricing blueprint as well. An agency working group is looking into whether it already has the legal authority to mandate disclosure.

The pharmaceutical industry opposes the move, arguing that it would offer little benefit to patients because neither consumers nor insurers usually pay list price. PhRMA also says such a requirement could raise First Amendment concerns.

MORE THAN 1,400 DRUG AND DEVICE POSITIONS OPEN AS FDA ROLLS OUT RECRUITING CAMPAIGN — The agency's drug, device and biologics centers had 1,434 vacant positions as of Friday, FDA told Prescription PULSE. Specifically: 1,014 in its drug center, 258 in its device center and 162 in biologics.

And these are despite new hiring authorities that the 21st Century Cures Act of 2016 gave FDA, allowing it to pay certain staff more competitive salaries and speed up the hiring process. At the time the law was passed, near the end of the Obama administration, FDA said the entire agency had 1,200 vacancies. This suggests that FDA’s hiring woes have worsened. However, the agency said it recently updated its system for tracking vacancies, so the new numbers aren’t directly comparable to past figures.

Gottlieb told Congress last week that the agency had hired the first two staff members under the new Cures Act authority — both deputy center directors. It also has identified 38 occupations in the agency that meet the requirement for the alternative pay system.

The FDA last week launched a new recruitment campaign that includes print advertisements on Washington, D.C.-area transit and a new slogan: "You want to make a difference. FDA wants to hire you."

The agency also committed to modernizing and improving its hiring system as part of the FDA Reauthorization Act of 2017. It put out an assessment of its hiring and retention processes in November and began testing a new hiring pilot in 2018. Meanwhile, FDA’s staffing difficulties could get worse before they get better — a June report to Congress quantified a large wave of employees that will soon to be eligible for retirement.

A message from the Partnership for America's Health Care Future: Americans deserve choice and control, but the public option could eventually force all Americans into a one-size-fits-all government health insurance system. Learn more.

A RIGHT-TO-TRY MIDDLEMAN? COMPANY LOOKS TO MATCH PATIENTS WITH EXPERIMENTAL MEDS — Batu Biologics announced Thursday that it filed a patent “covering methods of matching cancer patients with experimental drugs under the new Right to Try Law.” The company wants to use blood profiling — “liquid biopsy” — to screen for materials generated by tumors and match them with experimental drugs “that are most likely to induce a therapeutic effect,” CEO Samuel Wagner said in a release.

Wagner told POLITICO the company would charge patients for these services, including counseling that could help them decide which experimental drug to use use. Batu also plans to serve as a middleman between patients and drugmakers to ease access to the products. And the company wants to establish clinics where patients could be treated with the experimental medicines. Wagner said it is discussing a partnership with a hospital to open right-to-try outpatient clinics.

No liquid biopsy tests have been approved by the FDA, Wagner acknowledged. Because the tests are investigational, he said, “they would be used as a research tool to suggest the therapeutic agents that may have the best efficacy” but would not be used to “diagnose the patient.” Batu would also offer biopsy tests approved by FDA to patients seeking to use the authority granted by the right-to-try law, S. 204 (115), to request access to experimental drugs directly from drug companies, skirting FDA’s compassionate use program.

Bioethicists were concerned about the promises Batu made in its press release.

“Many dying patients would be willing to spend their life savings on things that promise them some chance — the problem is that lots of those promises will be meaningless," said the University of Pennsylvania's Holly Fernandez Lynch. "If we don’t know a drug is safe or effective, how could we possibly know which patients it is most likely to be safe or effective for?”

NYU's Alison Bateman-House said the company should be required to conduct studies showing that it can get usable data from the liquid biopsies — and can use that data to match patients with drugs that make sense for their condition — before it begins charging for those services.

Added Lynch: “These brokering relationships could further exacerbate the problem of investigational therapies only being available to the well off/well connected.” The Penn bioethicist wondered whether fees would be contingent on a patient's ability to gain access to the drug — the right-to-try law doesn’t mandate that companies provide the medicine, and Batu would have no control over that decision.

HOUSE GOP MEMBERS SEEK FTC REVIEW OF PAST PBM DEALS — Republicans on the House Energy and Commerce Committee sent a letter late Friday to the Federal Trade Commission requesting a review of past pharmacy benefit manager deals and how they have affected drug prices. The request comes as two proposed megamergers — CVS Health's acquisition of Aetna and Cigna's purchase of Express Scripts — are under Justice Department review.

Reps. Greg Walden of Oregon, Gregg Harper of Mississippi and Michael Burgess of Texas pointed out significant industry consolidation over the last decade, with just three PBMs now accounting for 70 percent of market revenue. PBMs have argued in the past that their size gives them the leverage they need to negotiate lower prices. An Express Scripts spokesperson told POLITICO that the company saved payers $32 billion on prescription drugs last year. Read the letter here and more for Pros here.

PhRMA QUESTIONS ICER IN NEW REPORT — An Avalere report commissioned by the drug lobby says that the Institute for Clinical and Economic Review, a nonprofit that’s attracted increasing attention for its cost-effectiveness assessments of new drugs, is using methodologies that “can lead to substantial and unpredictable variability” in its conclusions. Given that actual FDA new drug approvals vary year-to-year, ICER’s use of an average approval rate could skew estimates on how much new drugs will affect budgets. Those budget figures play a big role in whether ICER ultimately deems a drug cost-effective.

ICER averages FDA drug approvals over the previous two years, which institute spokesperson David Whitrap told POLITICO is sufficiently precise to alert the system to a new drug that could pose a budgetary challenge.

“What the PhRMA-funded report highlights — i.e., that our budget impact threshold varies based on how many new drugs are approved each year — is exactly the same reason that policymakers find it useful,” he said.

PhRMA has gone after the institute before, as have its members: Amgen criticized ICER's assessment of costly cholesterol medicines; AbbVie maintained there were “significant flaws” in its 2017 report on Humira and its rivals. Yet several multinational drug companies also fund ICER or sit on its advisory board — among them Merck, Johnson & Johnson, AstraZeneca, GlaxoSmithKline, Novartis and Sanofi — as does the National Pharmaceutical Council, another industry group, plus multiple insurers and pharmacy benefit managers.

PHARMA IN THE STATES

States introduced "unprecedented" drug cost legislation — Twenty states passed 37 bills related to drug costs in a record legislative season that saw 160 bills introduced on the topic, the National Academy for State Health Policy said. A chunk of those focused on PBMs, with 84 bills drafted and 22 enacted, ranging from PBM transparency regulations to legislation banning so-called gag clauses from pharmacy contracts. Eight states also introduced wholesale drug importation legislation — only Vermont has passed it — while five of the 26 bills focused on drug pricing transparency became law. The breakdown is here.

Ohio AG ramps up PBM investigation — Ohio Attorney General (and Republican nominee for governor) Mike DeWine said he is hiring outside legal counsel and “putting pharmacy benefit managers on notice” in an ongoing probe into their billing practices. His warnings came a week after CVS Caremark sued to block a state-commissioned report on PBMs’ Medicaid billing, arguing that it contained trade secrets. A state judge two weeks ago delayed publication of the full report, which asserts that Ohio taxpayers paid $223.7 million more for prescription drugs in a year than PBMs reimbursed pharmacies for those drugs. DeWine then tweeted that Ohio “will not hesitate to be the first state to demand accountability from PBMs.” More from the Columbus Dispatch here.

New Jersey could reverse “gift ban” limits — The state’s attorney general is looking to soften key parts of New Jersey's so-called gift ban, a barely seven-month-old regulation of drug company and prescriber relationships that then-Gov. Chris Christie enacted just before he left office. The current law limits drugmakers to spending $15 on prescribing doctors’ meals, a cap that new AG Gurbir Grewal called “unrealistic.” His proposed amendments would eliminate spending caps entirely for meals as long as they serve an educational purpose. Spending limits would remain, although loosened, for meals tied to promotional activities, but all meals — for whichever purpose — would not have to be factored into the $10,000 annual cap on contracts between drug companies and prescribers. Read more from Policy & Medicine here or check out the full proposal here.

PHARMA WORLDWIDE

Trump and the EU talk medical devices — The European medical device industry is on board with a move to try to develop common EU and U.S. medical device standards, something European Commission President Jean-Claude Juncker committed to in his meeting with Trump last week, our EU colleagues report. MedTech Europe CEO Serge Bernasconi said in an emailed statement that his trade organization welcomes “regulatory cooperation and convergence of systems" as long as they "help and protect patients.”

Nicole Denjoy, secretary-general of the medical device trade group COCIR, would “encourage” the U.S. and EU to “negotiate bilaterally for mutual recognition of medical devices, creating a thriving transatlantic region, spurring innovation, promoting safety and bringing benefits to patients on both sides of the Atlantic.”

DOCUMENT DRAWER

A Health Affairs blog post discussed out-of-pocket spending in Medicare Part D and potential reforms, including the timing of drug payments.

The FDA announced two programs for quality metrics that it said would improve dialogue with drug manufacturers.

PHARMA MOVES



Gilead President and CEO John Milligan will step down and leave the board at the end of this year after nearly three decades with the company, which promised a search for a successor.

Bristol-Myers Squibb Chief Commercial Officer Murdo Gordon will become Amgen’s executive vice president of global commercial operations, replacing Anthony Hooper when he retires in September. Amgen also named David Reese, currently senior vice president of translational sciences and oncology, as its new executive vice president of R&D. He replaces Sean Harper, who the company said is leaving to pursue opportunities in early-stage biotechnology.

CATCHING OUR ATTENTION: WALMART'S OWN DRUG PLAN IS CHEAPER FOR SOME MEDICARE PATIENTS — The retailer’s $4 generic prescription drug program is less expensive than many Medicare patients’ own insurance plans, a study in the Annals of Internal Medicine finds. Authors of the study found that 21 percent of Medicare and Medicare Advantage plans required patients to pay more out-of-pocket than they would using Walmart’s non-Medicare plan, The Times-Picayune reported.

Lead author Joseph Ross was partially inspired to carry out the study because of discussion around so-called pharmacy gag rules, contract clauses that bar pharmacists from telling consumers if they could save money by paying directly rather than through insurance. PBMs have denied using those clauses in contracts, but a bill outlawing the practice passed the Senate HELP Committee by voice vote last week. More on the study here.

Follow us on Twitter Sarah Owermohle @owermohle