Detailed plan outlines nine suggested actions Congress and the
administration should take to create healthier and more competitive
pharmaceutical markets
WASHINGTON--(BUSINESS WIRE)--
Premier
Inc. (NASDAQ: PINC), a leading healthcare improvement company, today
released nine
policy recommendations designed to stimulate competitive markets for
pharmaceuticals. Premier 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.
“By and large, skyrocketing drug costs are a result of unhealthy markets
that lack competition,” said Michael J. Alkire, chief operating officer,
Premier. “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.”
A wealth of research and insights prove that competition in the
pharmaceutical marketplace is a powerful antidote to rising costs.
According to the Food and Drug Administration (FDA), when two or more
generic drug makers enter the market, prices fall to 52 percent of the
original price, and continue to drop as more competitors enter the
market.
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 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 led Premier to develop the following
recommendations, which can be implemented in combination or as
stand-alone reforms.
-
Speed the FDA’s drug approval process: Congress should require
the FDA to prioritize 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
stipulated in the “Making Pharmaceutical Markets More Competitive Act.”
-
Prohibit manufacturers from misusing the Risk Evaluation and
Mitigation Strategy (REMS) to limit competition: Manufacturers
have used the FDA’s REMS program to create restrictive distribution
networks that deny generic drug makers access to samples for
bioequivalence studies, which are required for the drug approval
process. Congress should stop these anticompetitive practices by
prohibiting manufacturers from restricting access to covered products,
as called for in the CREATES Act.
-
Eliminate pay-for-delay deals: 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 cost consumers and taxpayers an estimated $3.5
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.
-
Ensuring access to biosimilars: 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 U.S. licensed products that often cost much more than those
from other countries.
-
Prevent abuses of orphan drug status: Orphan drug status
creates incentives for manufacturers to develop drugs that assist in
the treatment, diagnosis or prevention of rare conditions. However,
the designation is abused when companies apply for and win orphan drug
status, only to expand its use to other indications. Congress 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.
-
Crack down on product evergreening: 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 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.
-
Prevent abuse of Citizens Petitions: Manufacturers seeking to
block generic entry can file frivolous citizens petitions,
contributing to the FDA’s application backlog and delaying market
entry by months. According to an analysis, brand manufacturers, not
consumer groups, were behind 92 percent of all citizens petitions, and
90 percent of them were rejected. To help address this problem,
petitions should be required to be filed by the principles, not front
groups or consultants that mask identity. Further, frivolous petitions
should be subject to financial penalties that disincent this
anticompetitive behavior.
-
Ensuring safe, decades-old drugs are still available to consumers
at reasonable prices: The FDA has launched initiatives to
encourage formal approvals for older, grandfathered products. As part
of this process, the FDA requires competing manufacturers to exit the
market once a New Drug Application (NDA) is approved. When these
manufacturers leave the market, providers have experienced significant
price increases due to the lack of competition. FDA should allow other
manufactures 18 to 24 months to exit the market after announcing the
approval of an NDA.
-
Generic drug labeling: Under current law, brand and generic
versions of a drug are required to carry the same labeling. However,
the FDA has proposed a new rule that would change this requirement by
making both brand and generic makers responsible for their own
labeling. This will create different labels for equivalent products,
resulting in confusion that could undermine generic prescribing.
Instead, the FDA should be responsible for reviewing all safety
information and serving as the central authority for uniform labeling.
“With a new administration and Congress, now is the time to hit the
reset button and make some common sense changes to the current laws in
order to drive greater competition in the market. There has been a lot
of talk and promises made to voters and taxpayers, who are looking to
Congress for actions that will finally address overwhelming price
increases in the drug market,” said Alkire. “These proposals should not
be controversial – we should all welcome reforms that foster competition
and opportunity. Finally, while this is not a legislative or regulatory
request, we strongly urge the pharmaceutical industry to take additional
steps to test the relative effectiveness of their new drugs. New does
not necessarily mean better, and providers need more evidence-based
information to determine which product produces the best results for
their patients.”
About Premier Inc.
Premier Inc. (NASDAQ: PINC) is a leading healthcare improvement company,
uniting an alliance of approximately 3,750 U.S. hospitals and more than
130,000 other provider organizations. With integrated data and
analytics, collaboratives, supply chain solutions, and advisory and
other services, Premier enables better care and outcomes at a lower
cost. Premier, a Malcolm Baldrige National Quality Award recipient,
plays a critical role in the rapidly evolving healthcare industry,
collaborating with members to co-develop long-term innovations that
reinvent and improve the way care is delivered to patients nationwide.
Headquartered in Charlotte, N.C., Premier is passionate about
transforming American healthcare. Please visit Premier’s news and
investor sites on www.premierinc.com
for more information about the company.
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Source: Premier Inc.