Becerra asks for supply chain monitoring authorities, incentives for antimicrobial drugs

The head of the US Department of Health and Human Services (HHS) is asking lawmakers for additional authorities to track product supply chains to avoid shortages and the need to give incentives to antimicrobial drug manufacturers to develop new products.

HHS Secretary Xavier Becerra discussed President Joe Biden’s FY2024 budget request for his department during a Senate Finance Committee hearing on 22 March. While lawmakers questioned him about reimbursement issues regarding the Centers for Medicare and Medicaid Services (CMS) and increased funding for mental health services, the secretary also talked about the federal government’s efforts to ensure the security of product supply chains, fears about antimicrobial resistance and concerns from lawmakers that drugs granted accelerated approval are not being reimbursed by CMS.

Sen. Benjamin Cardin, D-MD, noted that according to the American Society of Health-System Pharmacists, 150 drugs were added to the drug shortage list by the Food and Drug Administration (FDA) in 2022 bringing the total number of drugs on the list to 295. Cardin also noted the administration’s budget request includes a proposal to extend drug expiration dates, similar to a bill he previously introduced with Sen. Susan Collins, R-ME.

“The wealthiest nation in the world spends the most of any nation on drugs and yet we have important drugs that are in short of supply here,” said Cardin. “How do you intend to mitigate this challenge that we have in this country?”

HHS has analyzed several recent shortage events and determined that, for financial reasons, many manufacturers keep their product inventories quite low, Becerra said. When faced with increased demand or any other supply chain stressor, manufacturers simply can’t bridge the gap. In response, HHS has increased its surveillance to try to spot potential supply chain shortages before they happen, he added.

“We don't regulate that supply but we want to have more eyes on it so we can make sure [manufacturers are] preparing for that broadside that might come,” said Becerra. “We're trying to make sure we help them mitigate any supply chain interruption.”

“If they get some of their materials from overseas, some country, we want to make sure there isn't some disruption, whether it's politically based or supply based, that keeps them from being able to produce,” he added. “So, we'll work with you because this is a big issue.”

In the FDA’s budget justification document, the agency has asked for authority to require manufacturers to provide additional production data that may help the agency spot supply shortages before they happen and work with manufacturers to find solutions. In particular, the request includes additional authorities to require medical device and diagnostics manufacturers to provide such data beyond the authority the agency has under a public health emergency (RELATED: FDA seeks 10% boost in Biden’s FY 2024 budget, Regulatory Focus, 9 March 2023).

Cardin agreed with Becerra but contended that drug companies such as insulin manufacturers have intentionally reduced production to justify increasing the price of their products. Becerra said he wanted to work with lawmakers on that issue as well though he did not elaborate.

Sen. Todd Young, R-IN, brought up the Pioneering Antimicrobial Subscriptions to End Up surging Resistance (PASTEUR) Act which he has co-sponsored in the past. The legislation is meant to create incentives for antimicrobial drug developers by guaranteeing the federal government will buy a certain amount of their products annually.

“The world is facing an antimicrobial resistance crisis… We’re seeing more resistance to infections right now than we ever have before and blessedly, there has been a lot of public attention that has been paid to this,” said Young. “The antimicrobial market is failing. They’re hard to develop; they’re almost impossible to sell for at least five years because of the need to hold new antimicrobials in reserve to prevent resistance.”

He went on to say that the administration has included a proposal in the budget that is similar to the PASTEUR Act and asked Becerra to elaborate.

“We have to figure out a way to have a consistent flow of new drugs that combat bacteria, and it’s a tough business. There’s not as much money in it as you might think,” said Becerra. “Part of what we think may be a solution is that rather than have a manufacturer produce a good drug and try to market it and depend on the market actually receiving the drug and buying it, is maybe have more of a subscription model.

The HHS secretary compared it to a subscription model similar to paying for a video streaming service where American taxpayers foot the bill to buy a predetermined amount of product from manufacturers to ensure antimicrobial drug makers are guaranteed a market.

“This way there’s always money in the pot and these manufacturers have an incentive to go forward with their production and creation of the drugs because they know there will be money in the pot,” Becerra added. “Most of these manufacturers are afraid there won’t be a market for their drug.”

Sen. Mike Crapo, R-ID, also complained that after a drug has been approved through FDA’s accelerated approval pathway, it is not automatically reimbursed by CMS. He argued that the policy disincentivizes drug makers from using the pathway.

“The FDA's accelerated approval pathway has provided a lifeline for countless Americans, advancing access to safe and effective medicines for cancers, rare diseases, HIV and other conditions like Alzheimer’s, years before these treatments could come to market” under the traditional pathway, he said. “Unfortunately, this administration has taken the precedented steps to erode this pathway, deterring lifesaving innovation and delaying access to care.”

Crapo said the CMS’s April national coverage policy for aducanumab (Aduhelm) was a “troubling trend.” CMS said it plans only to cover monoclonal antibodies such as aducanumab that target amyloid if the drug has been approved through FDA’s traditional approval pathway because otherwise, they have not proven clinical efficacy. However, the agency is willing to cover the use of such drugs in accelerated approval studies.

“I recently led a letter urging the administration to abandon this misguided model given the potential for slower and slimmer pipelines of new medicines for seniors among other serious conditions,” said Crapo. “I also wrote to you last year about the grave implications of the Alzheimer’s coverage decision.” “How does your department plan to ensure that accelerated approval pathway remains a robust and viable option for innovators and most importantly for patients?” he added.

Becerra said that HHS is doing all it can to accelerate new treatments to market and get them to patients.

“Whether it's Alzheimer's, COVID, hepatitis C, we're moving, and we want to be there and we want to look for every innovative approach, every pathway possible to make sure that one we can put a safe and effective drug in front of the American people and then also determine if it will be covered by Medicare,” he said.

Becerra asks for supply chain monitoring authorities, incentives for antimicrobial drugs

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