Asia Regulatory Roundup: Australia Squeezes Prices but Wins Industry Support

Regulatory NewsRegulatory News | 20 February 2018 |  By 

Welcome to our Asia Regulatory Roundup, our weekly overview of the top regulatory news in Asia.
Australia Squeezes Prices but Wins Industry Support With New Drug Actions
Australia has passed legislation that deepens the statutory price cuts triggered by the approval of the first generic or biosimilar competitor to a brand product. The amendment changes the cut from 16% to 25%, but the overall legislative package still won the support of big pharma trade group Medicines Australia.
Details of the changes to the pricing structure emerged last year when the Australian government and Medicines Australia entered into a five-year strategic agreement. The agenda advanced again this week, when legislators voted in favor of a bill that implements the legal amendments called for in the strategic agreement. The changes balance price cuts designed to save Australia $1.4 billion over the next five years against actions that will benefit developers of innovative drugs.
Both sides of the agreement feature multiple moving parts. In terms of cuts, the government has increased the statutory price reduction upon the approval of an off-patent competitor from 16% to 25%. The legislation also ensures the price of drugs will fall over time. The government will cut the price of a drug by 5% after it has been registered for five years. Further cuts of 10% and 5% follow after 10 and 15 years, respectively.
The government has won industry support for legislation that enacts those changes by including actions that sweeten the deal. Medicines Australia persuaded the government to set money saved through the cuts aside to support more listings of new drugs and got it to lock in the agreed pricing structure until 2022. The government also committed to leaving prescribing choices in the hands of doctors — rather than forcing automatic substitution — and to accelerating access to medicines.
Having secured those provisions and accepted the price cuts, Medicines Australia is now working to ensure the government holds up its side of the bargain.
“Now that they are locked down, it’s important that government and the departments work with the wider industry to ensure that the [Pharmaceutical Benefits Scheme] remains well-funded so that medicines can continue to be provided to all Australians,” Milton Catelin, chief executive of Medicines Australia, said.
Legislative Amendments, Press Release
NPPA Reveals Stent Price Rift Between Local and Multinational Manufacturers
The National Pharmaceutical Pricing Authority (NPPA) has revealed a rift in industry perceptions of the need to reform cardiac stent price controls. Meeting minutes shared by NPPA show multinational companies pushed for the subcategorization of drug-eluting stents, only for their local rivals to lobby for the the Indian cost watchdog to maintain the status quo.
NPPA ultimately sided with the local manufacturers, leading it to tweak the price ceilings but not add a new premium cost category for certain high-end devices. The meeting minutes reveal multinational companies, particularly those from the United States, argued such differential pricing is needed to ensure it is economically viable to develop and sell devices that offer incremental innovations. As it stands, Abbott, Medtronic and others think the price cap deters such gradual advances.
Industry associations and some cardiologists added to the calls for subcategorization of stents. These calls coalesced around the idea of using a matrix system that links prices to certain parameters, such as stent thickness, rather than the current two-tier model. That idea failed to win over NPPA.
The cost watchdog’s resistance to the creation of a new category stems from its belief there is a lack of evidence showing the latest stents deliver better outcomes than older drug-eluting products. The manufacturers of these new stents told NPPA it will take years to generate such data and that there is a need to reward incremental innovations that fall short of superiority. NPPA was receptive to that idea, but after “intensive deliberations” concluded it cannot currently reward incremental advances.
NPPA’s position agrees with that put forward by Indian stent manufacturers. The meeting minutes show local device companies were opposed to creating more pricing categories on the grounds that there is a lack of clinical evidence to support a higher cap for certain stents.
Meeting Minutes
Saudi Arabia Orders Drug, Device Companies to Disclose Payments to Doctors
The Saudi Food and Drug Authority (SFDA) has adopted rules on the disclosure of industry payments to doctors and healthcare organizations. SFDA wants drug and device companies to disclose all gifts, fees and other forms of payment they make to healthcare professionals and institutions.
Finalization of the document establishes a process for reporting payments. SFDA has told companies to provide details of individuals and organizations they pay, including a breakdown of the purpose, size and nature of the payments. The Saudi Arabian agency has provided forms for companies to use to make these disclosures, as well as one healthcare professionals can use when they receive gifts and payments. 
The document provides details of the sorts of payments companies and healthcare professionals need to disclose. SFDA expects to be kept informed about fees for consulting and speaking, payments to cover travel and accommodation, event sponsorships, grants, hospitality, gifts and the provision of scientific materials. An existing Saudi code on pharmaceutical pricing sets the level above which a payment must be disclosed at SR 50 ($13).
Like other agencies that have enacted transparency programs, SFDA hopes the initiative will minimize potential conflicts of interest and illegal or unethical relationships. In doing so, SFDA thinks the scheme will ensure public trust in the healthcare sector.
SFDA Guidance, Saudi Code
CDSCO Calls Meeting of Oxytocin Manufacturers to Address Misuse of Drug
The Central Drugs Standard Organization (CDSCO) has opened another chapter in its long-running attempt to curb misuse of oxytocin. CDSCO’s latest action is to convene a meeting of manufacturers of the hormone to discuss “appropriate measures” to stop its misuse.
Oxytocin is used by some farmers to increase milk production in cows. CDSCO wants to stop farmers from using the human peptide hormone in this way. That led the agency to ban the retail sale of the drug at pharmacies in 2014. Last year, CDSCO followed up by ordering its regional offices to collect evidence of the illegal production and import of oxytocin.
Despite trying to stamp out misuse, CDSCO continues to receive reports about the illegal production, import and sale of the drug. In response, CDSCO has called all manufacturers of oxytocin for use in humans and animals to a meeting “to discuss the matter for taking appropriate measures to prevent the misuse of oxytocin.”
The meeting is scheduled for 22 February.
CDSCO Notice
China Seeks Feedback on Drug Import Proposals
The China Food and Drug Administration (CFDA) has released draft rules on the registration of drug imports for consultation.
CFDA’s document addresses the repackaging of imported drugs, the process for making changes to a registration — for example to update the place of origin — and other supplemental applications. The guidance details whether the actions necessitate a new registration number or the resetting of the expiration date of the certificate.
The consultation period is open until 2 March.
CFDA Notice (Chinese)
Other News:
The Therapeutic Goods Administration (TGA) of Australia has issued a warning about Therakos Cellex Photopheresis System. Regulatory officials in the United States published an alert about the system earlier this month after receiving reports of blood clots. TGA is yet to receive such reports but has sent a warning to healthcare professionals as a precaution. TGA Notice


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