Coronavirus draws attention to FDA oversight of Chinese drugs Presented by the Partnership for America's Health Care Future

With help from Sarah Karlin-Smith, Arthur Allen and David Lim

On Tap

— Coronavirus hampers FDA oversight of drug supply chain, raising lawmakers concerns

— New life for the Senate drug bill? President Donald Trump gave it a bump this week.

— Biogen scores a big win to ward off rivals for a costly MS therapy.

A message from the Partnership for America's Health Care Future: Let’s build on what’s working in health care where private coverage, Medicare, and Medicaid work together to ensure every American has access to the care they need, not start over with a one-size-fits-all public option system. Learn more.

Happy Friday and welcome back to Prescription Pulse! Ah, capitalism. Gilead shares jumped 5 percent on Monday, and analysts have a theory why: News over the weekend that one of the California biotech’s antiviral medicines might work against the new coronavirus. As always, send pharma tips, news and coronavirus drug development to Sarah Owermohle ([email protected] or @owermohle) and Sarah Karlin-Smith ([email protected] or @sarahkarlin).

In Congress

CORONAVIRUS DRAWS ATTENTION TO FDA OVERSIGHT OF CHINESE DRUGS — Lawmakers are raising concerns anew about the U.S. reliance on foreign drug manufacturing amid the Wuhan coronavirus outbreak that has pushed FDA inspectors out of China. The novel disease outbreak could spark medical product shortages if the epidemic is not resolved swiftly, experts say.

The challenges come as Chinese drug manufacturing has been in Congress's spotlight following a series of warnings last year about contaminated batches of foreign-made drugs.

“There is emerging and I think correct issues about … how much we rely on production in China for basic drugs and all kinds of medical supplies,” Rep. Greg Walden, the House Energy and Commerce committee ranking Republican, said this week.

About 60 percent of factories manufacturing drug ingredients and finished medicines for U.S. patients are located overseas with China and India accounting for 40 percent of them.

FDA told POLITICO that manufacturers of FDA-regulated products have not reported any impacts on the supply chain that are creating the potential for shortages of critical medical products — but the situation is evolving. Due to coronavirus agency staff is departing the country and all FDA travel to China is canceled. FDA said it is deciding on a “case-by-case” basis whether to conduct inspections in the country, but experts say it is unlikley much work is occurring due to the staffing situation

Risk mitigation — There are ways FDA could try and mitigate harm from any lack of inspections, said Howard Sklamberg, a partner at Akin Gump and former deputy commissioner for global regulatory operations and policy who oversaw FDA’s inspections office.

If FDA got information about a potential public health risk from a facility in China it couldn’t inspect due to coronavirus it could potentially issue an import alert that would block those products from coming into the U.S.

He said they could also test and sample drugs at ports of entry in the U.S or try and obtain data remotely from manufacturers.

“The mere fact that there is currently a delay in inspection in China does not raise alarm,” he said. The risks, he added, particularly of shortages will depend on how long this crisis goes on.

Drug Pricing

IS THERE HOPE YET FOR THE SENATE DRUG BILL? Sen. Chuck Grassley got a long-awaited shout-out from the president on his drug pricing legislation, S. 2543 (116), during Tuesday’s State of the Union address. But while the president name-checked Grassley’s work, he stopped short of an endorsement, instead calling for bipartisan legislation that would “dramatically” lower prices.

The question is whether that’s enough to breathe new life into a measure that Senate Majority Leader Mitch McConnell has refused to take up — even as there is no other bipartisan package in sight.

Grassley and co-sponsor Ron Wyden (D-Ore.) have struggled to rally GOP support because of a provision that would fine drugmakers that raise prices faster than inflation. Gutting that measure would kill Democrats’ support — and the White House has tried to stay out of that debate. (But lawmakers might still be workshopping it: "Sen. Grassley is certainly talking about his bill with Sen. Wyden," the Iowa Republican's press secretary tweeted during SOTU.)

Still, Grassley took the Trump mention and ran, calling the bill in a statement "the only significant, bipartisan legislation in Congress that has been endorsed by President Trump.”

Vice President Mike Pence followed up with more supportive words for the bill the next day. “We’ve got legislation that’s bipartisan legislation,” Pence said on Fox News. “I’ve been in meetings in the West Wing where we’ve talked about this, and the president said pass the bipartisan bill. Put it on my desk.”

Trump heaped more praise on Grassley on Thursday when he commended the “tough” Iowa senator and said he is “an incredible guy.” The president also said there could have been progress on prescription drug prices by now — if impeachment hadn't gotten in the way.

House Democrats would take issue with that: They passed Speaker Nancy Pelosi’s drug bill, H.R. 3 (116), in December and chanted their support for the measure during the State of the Union. Pelosi told reporters before Trump's Thursday speech that Democrats had once negotiated with the White House and “thought we were in a good place ... until the president decided to go with pharma instead of the American people.”

And IPI still isn’t in sight: Trump made no mention in SOTU of the international pricing index, one of the last big pricing proposals up the administration’s sleeve right now. That proposal would clash with Grassley’s measure to cap price hikes in Medicare. But work on it may have been jump-started last month after Trump berated HHS Secretary Alex Azar for a lack of progress on drug prices.

WHAT HAPPENED TO INSULIN TALK IN SOTU? That’s what watchdog group Accountable.US’s drug industry-focused project Patients Over Pharma is asking in a new Freedom of Information Act request filed with HHS this week.

The plan, as Sarah Karlin-Smith and Adam Cancryn reported, was for a high-profile State of the Union announcement about lowering insulin costs. It didn’t happen. Two officials told Adam that the announcement wasn’t ready in time for the grand stage.

Patients Over Pharma wants all correspondence between HHS and White House staff on insulin and SOTU in the days leading up to the speech. "We know that Secretary Azar was supposed to recuse himself from the policymaking process” because of his former job as U.S. president for insulin maker Eli Lilly, said Eli Zupnick, spokesperson for Patients Over Pharma.

In the Courts

BIOGEN SCORES BIG PATENT WIN — The U.S. Patent Trial and Appeal Board struck down a patent challenge from Mylan this week, meaning Biogen’s profitable multiple sclerosis drug Tecfidera might not see generic competition until 2028.

If Mylan had won the case — tied to a patent for a certain dose of the drug — the generic could have hit the market by the end of this year. Biogen has made billions off the therapy, which has an annual list price of $82,000. The biotech’s shares soared on the ruling.

Why it’s big: Tecfidera made $3.3 billion in 2019, a massive portion of Biogen’s revenue. But it’s also earned the biotech criticism for steady price hikes: The medicine is one of seven that the Institute for Clinical and Economic Review called out for “unsupported” price hikes backed by no new evidence.

The patent board usually has a lower bar of evidence for ruling against a patent than district courts do, SVB Leerink analyst Marc Goodman said in a note. So if it didn’t strike the patent down, it’s pretty unlikely the judge in a separate district court case will — meaning Tecfidera is pretty safe from competition for now.

Eye on FDA

AGENCY SCREENS VISITORS — FDA may question visitors to its campuses and building about international travel due to the coronavirus public health emergency, the agency’s homepage says. The agency told POLITICO that it “often receives international visitors to its offices, especially for advisory committee meetings” and it wanted to give them advance notice. The move does not appear to be part of a broader government-wide policy. Previous FDA employees did not believe that similar steps were taken for other global outbreaks.

BABY STEP FOR BIOSIMILARS — The FDA issued draft guidance Thursday to shorten its application reviews for biosimilar label expansions from 10 months to six. It’s part of the Trump administration's effort to get more lookalike products approved to drive down drug costs. The rule also clarifies that a biosimilar maker can avoid patent infringement risks by asking the FDA, in its application, to delay considering a specific use for the drug until patents or exclusivity periods expire.

The guidance doesn't deal with the major obstacles to getting biosimilars to market, said Soumi Saha, senior director of advocacy for Premier. A bipartisan bill, H.R. 1520 (116), which would require brand-name drugmakers to publish all exclusivity and patent claims, would do a lot more to get cheap products out there, Saha said. Patent- and exclusivity-related challenges have helped keep 12 of 26 currently licensed biosimilars off the market.

The Federal Trade Commission and FDA announced a partnership Monday to crack down on false or misleading promotions of biologic medicines while working to keep brand-name drugmakers from blocking biosimilar competition.

Public Health

CDC SENDING OUT CORONAVIRUS DIAGNOSTIC KITS — Public health laboratories across the U.S. will soon be able to test for the Wuhan coronavirus without sending samples to CDC headquarters in Atlanta.

Two hundred kits are going out to U.S. labs, with another 200 going to international sites, each of which can test 700 to 800 patient samples. Labs will be limited to one test kit for the time being, but more are coming.

It will take a few days for the state, local and military labs to finish verification of the test and begin to report out cases, Nancy Messonnier, CDC’s director of the Center for the National Center for Immunization and Respiratory Diseases, told reporters earlier this week.

WHO TO CONVENE FORUM TO COORDINATE RESEARCH — The WHO is slated to hold a two-day meeting Feb. 11-12 to identify and coordinate international efforts on therapeutics and vaccines for the coronavirus, Director-General Tedros Adhanom Ghebreyesus told reporters Thursday.

"One of the key challenges is coordinating research funders to support key priorities," he said. "A lot of donors want to help, but we need to direct them to support agreed priorities rather than going off in different directions."

Research Corner

CDC: MONEY PROBLEMS HURT HIV DRUG ADHERENCE — An agency study published Thursday found that 14 percent of people with HIV infections used cost-saving strategies such as importing their HIV drugs, taking lower doses or skipping doses, or trying unproven alternative medicines. Those at risk in the study, conducted among about 4,000 patients in 2016-2017, were mainly people without Medicaid or private insurance, and those financially ineligible to participate in AIDS drug assistance programs.

HIV patients with money problems were more likely to have visited an emergency room, been hospitalized, or have viral loads high enough to infect others. Suppressing viral loads to the point that a person can’t infect others is key to Trump’s “Ending the HIV Epidemic” program.

A study in JAMA Internal Medicine this week found that Americans pay more than any other wealthy country for HIV drugs, but the U.S. has a lower viral suppression rate. It said lower prices would be key to eradicating AIDS, but drug prices have steadily increased.

REFERENCE PRICING COULD DRIVE DOWN CONSUMER SPENDING — Reference pricing could shift doctors’ prescribing habits toward medicines that are low-cost to consumers and their employers, according to a JAMA Network Open analysis.

Under reference pricing, employers’ or insurers’ drug payments are limited to the price for the lowest-cost drug in a category. Patients pay the difference if they use pricier medicines. Researchers argue that referencing pricing models give doctors incentives to switch their patients to cheaper options (versus high-cost ones with big rebates that consumers don’t see), ideally saving everyone some money.

While there are quite a few European examples of reference pricing, it’s still pretty limited in the U.S. Researchers said that consumers’ cost sharing spiked shortly after their plans adopted the model — presumably as doctors and prescriptions adjusted — but after a few months costs began steadily falling. That initial spike could still be a problem, though, especially because costs affect adherence. Researchers recommended improving electronic health records so doctors can make the reference pricing adjustment quickly.

INFLATION CAPS WOULD SAVE CONSUMERS MONEY — That’s according to a recent Health Affairs blog post that argues that provisions in both H.R. 3 and S. 2543 that fine drugmakers for raising prices past inflation would lower list price growth. Since consumers pay their share based on the list price, their out-of-pocket costs should also slow, write Arnold Ventures’ Anna Anderson-Cook, Kevin Love, Andrea Noda and Mark E. Miller.

But the penalty also makes it likely that drugmakers will simply launch new medicines with higher prices, they write — highlighting a concern brought up in bill markups as well. “Congress could consider other policies to address this issue such as secretarial negotiation, reference pricing based on international prices or cost-effectiveness, or some combination of the two,” recommend the authors, whose billionaire-backed nonprofit has endorsed the House bill that would allow HHS price negotiations.

Pharma Moves

Former FDA Commissioner Scott Gottlieb is joining Illumina’s Board of Directors. He is also on the board of Pfizer, Aetion and Tempus.

Myriad Genetics’ CEO Mark Capone resigned Thursday, effective immediately. CFO R. Bryan Riggsbee is stepping up as interim president and CEO.

The Association for Accessible Medicines named its 2020 Board of Directors.

A message from the Partnership for America's Health Care Future: As the unaffordable costs and negative consequences of new government-controlled health insurance systems like the public option become clearer, Americans are urging our leaders to build on what’s working and fix what isn’t – not start over. Learn more.

Document Drawer

The Patent Trial and Appeals Board ruled against Gilead in a dispute with CDC over two patent claims the government has for Truvada, the HIV prevention medicine.

FDA issued a final order classifying the HIV drug resistance genotyping assay using next generation sequencing technology as a class II medical device with special controls, down from an automatic class III designation.

Follow us on Twitter Sarah Owermohle @owermohle

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