Senate Committee Considers Priority Reviews to Stem the Tide of Off-Patent Drug Price Hikes

Posted 09 December 2015 | By Zachary Brennan 

Senate Committee Considers Priority Reviews to Stem the Tide of Off-Patent Drug Price Hikes

Sens. Susan Collins (R-Maine) and Claire McCaskill (D-Mo.) hosted a hearing Wednesday to discuss steep price increases for some off-patent drugs and what can be done to ensure patients and hospitals can afford these drugs moving forward.

The hearing, which is the first in a series that focuses on companies that, as Collins puts it, “act more like hedge funds than pharmaceutical companies,” follows letters sent to four specific companies – Valeant Pharmaceuticals, Turing, Retrophin and Rodelis Therapeutics -- over price gouging of off-patent drugs, some of which have been off-patent for decades.

“Our system has relied on competition to bring more affordable generics to market, but when competition breaks down, the discipline that keeps prices in check can disappear,” Collins said.

In one of the cases with Turing’s toxoplasmosis drug Daraprim, babies with congenital toxoplasmosis treated for 12 months have seen the total treatment cost go from about $1,200 to $69,000, David Kimberlin, Professor and Vice Chair for Clinical and Translational Research at the University of Alabama at Birmingham, told the panel.

Sens. Tim Kaine (D-VA) and Sheldon Whitehouse (D-RI) both referred to the patients in some of these circumstances as hostages, held by the whims of pharmaceutical CEOs who raise the prices of generic drugs after purchasing them just because they can.

Priority Review Pathway?

One possible solution to further increase competition in the generic industry proposed by Gerard Anderson, professor, of health policy and management at Johns Hopkins University, would be to establish a priority review process for such generics.

Similarly to how brand name manufacturers can win priority review from FDA for treatments with unmet health needs, Anderson said, “The priority review would be triggered if there were little or no price competition for that generic drug.”

McCaskill agreed that if there was a system whereby a competitor-less generic could be approved in as few as six months hedge funds and other companies would be detracted from purchasing these drugs and jacking up the prices because of the limited amount of time that they would have a monopoly.

Mark Merritt, President and CEO of the Pharmaceutical Care Management Association, a national association of US pharmacy benefit managers, told the Senate panel he would provide a list of drugs that could be targeted by companies in the future for such price hikes and McCaskill discussed publishing it.

Other senators and witnesses discussed the use of compounding as a stop-gap measure to increase competition for a particular generic, though Anderson noted compounded drugs do not go through the rigorous testing and approval process from FDA, saying, “it’s at best, a second-best solution.”

And Anderson also called for this priority review process for some generics to occur outside FDA since the agency does not have as much expertise in economic evaluation as say, the Assistant Secretary for Planning and Evaluation in the Department of Health and Human Services.

He also raised concerns about consolidation in the generics industry and called on Congress and the Federal Trade Commission to take a careful look at how consolidation is restricting competition.

Sudden Price Spikes in Off-Patent Drugs: Perspectives from the Front Lines

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