More Data Oversight on the Horizon

No matter what, technology will always move faster than the law. With this maxim and our ever increasing reliance on convenient information, we have seen technology companies try to bring us what we want to see while also collecting a staggering amount of information on consumers. With regulations scant on personal data, Congress is slowly becoming more active in making policy governing technology. 

In November 2019, Congresswomen Anna G. Eshoo (D-CA) and Zoe Lofgren (D-CA) introduced the Online Privacy Act of 2019 (H.R. 4978). According to the sponsors, the bill proposes to strengthen user rights, places obligations on companies to protect users’ data, establishes a new federal agency to enforce privacy protections, and strengthens enforcement of privacy law violations.  

The sponsors press release discussed the following points which are highlights of the bill: 

• Creating User Rights – The bill grants every American the right to access, correct, or delete their data. It also creates new rights, like the right to impermanence, which lets users decide how long companies can keep their data.

• Placing Clear Obligations on Companies – The bill minimizes the amount of data companies collect, process, disclose, and maintain, and bars companies from using data in discriminatory ways. Additionally, companies must receive consent from users in plain, simple language.

• Establishing a Digital Privacy Agency (DPA) – The bill establishes an independent agency led by a Director that’s appointed by the President and confirmed by the Senate for a five-year term. The DPA will enforce privacy protections and investigate abuses.

• Strengthening Enforcement – The bill empowers state attorneys general to enforce violations of the bill and allows individuals to appoint nonprofits to represent them in private class action lawsuits.

 With so many controversies surrounding the use and rights of consumer data, we fully expect more government oversight into technology. If you are a technology stakeholder and you are interested in learning more about emerging policy or understanding potential risks to your business model contact us for legal or government affairs solutions at Lanton Law.

The Specialty Pharmacist's Role in Educating Patients about Biosimilars and Biologics

Ron Lanton III, Esq. of Lanton Law discusses with Specialty Pharmacy Times the specialty pharmacist's role in educating patients about biosimilars and biologics. https://www.pharmacytimes.com/news/the-specialty-pharmacists-role-in-educating-patients-about-biosimilars-and-biologics

Specialty pharmacies really can help the patient in getting the education out about biologics and biosimilar products in a number of different ways. First of all, the specialty pharmacy is very educated about what products are out on the market, and they’re in close communication with the physician. It’s also going to depend on the formulary and whether or not the pharmacy benefit manager or the carrier is actually going to carry the drug on the particular formulary. So I think if it does, I mean, obviously they don’t know everything about the patient’s formulary but they can find out that information and then see whether or not that’s good for the patient to take, as far as cost and outcomes-wise. So I think that with the specialty pharmacist being positioned in the center of everything, it’s a great position to be in for them to say, ‘Look, this is coming down. This is something I think that can help you, and let’s try and see if we can lower your costs and improve your outcome.’

New Administration Rules Seek Healthcare Cost Transparency

With the release of the Administration’s American Patient’s First Blueprint in May 2018, price transparency was shown to be a centerpiece of the Administration’s governing agenda. Last week, the Administration released two rules, each at different points of the rulemaking process. 

The first is a final rule effective 1/1/21 targeting hospitals that will require them to display their negotiated rate to patients. The second is a proposed rule which according to CMS  “includes two approaches to make health care price information accessible to consumers and other stakeholders, allowing for easy comparison-shopping.” The proposal has a 60 day comment period. At this point in time there is no anticipated effective date.  

Pricing transparency continues to be a re-emerging theme that shows no signs of slowing down. If you need strategic advice or lobbying where price transparency is concerned, contact us at Lanton Strategies. If you need legal advice with regulatory or compliance concerns, contact us at Lanton Law.

New PBM Legislation Advances in Congress

Congresswoman Amy Spanberger (D-VA) has sponsored H.R. 2115 titled “Public Disclosure of Drug Discounts and Real-Time Beneficiary Drug Cost Act.” This is important for healthcare stakeholders, as this proposed legislation requires greater transparency for discounts provided by manufacturers. This bill also proposes to include real-time benefit information as part of a prescription drug plan’s electronic prescription program under Medicare. 

Below are a few of the bill’s highlights: 

“In order to allow the comparison of PBMs’ ability to negotiate rebates, discounts, direct and indirect remuneration fees, administrative fees, and price concessions and the amount of such rebates, discounts, direct and indirect remuneration fees, administrative fees, and price concessions that are passed through to plan sponsors, beginning January 1, 2020, the Secretary shall make available on the Internet website of the Department of Health and Human Services the information with respect to the second preceding calendar year provided to the Secretary on generic dispensing rates (as described in paragraph (1) of subsection (b)) and information provided to the Secretary under paragraphs (2) and (3) of such subsection that, as determined by the Secretary, is with respect to each PBM.”

Not later than January 1, 2021, the program shall implement real-time benefit tools that are capable of integrating with a prescribing health care professional’s electronic prescribing or electronic health record system for the transmission of formulary and benefit information in real time to prescribing health care professionals. With respect to a covered part D drug, such tools shall be capable of transmitting such information specific to an individual enrolled in a prescription drug plan. Such information shall include the following:

(I) A list of any clinically-appropriate alternatives to such drug included in the formulary of such plan.

(II) Cost-sharing information for such drug and such alternatives, including a description of any variance in cost sharing based on the pharmacy dispensing such drug or such alternatives.

(III) Information relating to whether such drug is included in the formulary of such plan and any prior authorization or other utilization management requirements applicable to such drug and such alternatives so included.

Conclusion:

Efforts to advocate for stronger PBM transparency has picked up in the last few years but this legislation which was voted 403-0 is telling. Usually this time of the year has Congress winding down its legislative agenda in preparation for the upcoming election. While I don’t expect to see too much legislation that is politically charged passing by year end, I do foresee either something on drug pricing or PBM transparency; if not both passing before we head into 2020. This Act is currently in the U.S. Senate. 

If you have additional questions about lobbying or need strategic advice on developing state or federal policies, contact Lanton Strategies or our sister company Lanton Law for regulatory compliance and legal issues.

Setting the Record Straight on March-In Rights and Drug Prices

This article appeared in Specialty Pharmacy Times

Following the launch of sofosbuvir (Sovaldi) in 2013, the pharmaceutical industry has been in the crosshairs of the government because of the drug's cost. Many industry stakeholders have been wrestling with difficult questions: How should the fair value of a drug be determined? What should the cost be for better outcomes? How much should a drug cost if it extends life? We have seen some political solutions advanced, such as the International Pricing Index, the Rebate Rule, and others, but no silver bullet to controlling costs has manifested to date.

The political costs of seeing an initiative through have often been harsh. The solution called march-in rights has been discussed frequently, but it has been clouded in confusion. Let’s examine what this policy is and whether it is a feasible solution to controlling prescription drug costs.

March-in rights arose from the Bayh-Dole Act, otherwise known as the Patent and Trademark Law Amendments Act, which was enacted in 1980. The law, found at US Code, Title 35, Part II, Chapter 18, Section 203, addresses intellectual property arising from federal government–funded research.

The law states that if an invention was created with the assistance of federal funds, the agency that provided the funding can require the granting of licenses to responsible applicants. These licenses can be exclusive, nonexclusive, or partially exclusive. If any licensee refuses to abide by reasonable terms for the granted licenses, then the federal agency can empower itself with a license based on specific conditions outlined in the law.

Right now, stakeholder groups are lobbying the National Institutes of Health by arguing that high prescription drug costs are not meeting patient needs, thus satisfying the burdens outlined in the law. Although it sounds as though the federal government can impose price controls on prescriptions, the government has never invoked this type of authority since it legally does not exist within the statute. If this were the case, the industry could possibly witness less innovation, which could inadvertently lead to the devaluation of patents in general.

The Commerce Department’s latest actions may have put the nail in the coffin on exploring the idea of government intervention via price controls. In April 2019, the National Institute of Standards and Technology finalized its green paper that recommends against the government exercising its march-in rights to lower prescription drug costs.1

“The green paper notes that in the intervening decades, interpretation of the Bayh-Dole Act has created confusion over the ‘march-in rights’ and ‘government-use license’ provisions, and that some stakeholders want clarification,” the authors wrote. “March-in rights described under Bayh-Dole allow the government, in certain limited circumstances, to force the party with title to a government-funded intellectual property to grant a license to another entity. To date, the government has never exercised these rights.”

If march-in rights are not the answer to lowering drug prices, then what is? The answer lies with Congress, which alone has the power to amend the Bayh-Dole Act to clarify when government intervention can occur, either by legislation or a regulatory directive. If not through Bayh-Dole, then Congress is the best place to legislation prescription price controls. There are several legislative bills pending on this issue, including the Prescription Drug Pricing Reduction Act, which has gained public momentum in the last few weeks. It will be interesting to see whether there is an emerging policy on price transparency from the states, as several legislatures are exploring solutions to this issue.

I am neutral when it comes to finding the appropriate answer to this issue. I believe that patients should have access to affordable medications. But how do we define affordable and what market-sufficient protocols could convince manufacturers that they should continue to innovate, knowing that they may not recoup their research and development costs?

My neutrality comes from not having an answer. I am for specialty stakeholders being able to operate on a level playing field while servicing their patients. I would advise that whenever there is a gray area, such as march-in rights, we should seek to obtain a long-lasting solution by changing the statute.

Yes, it may take significant time, but going through the courts is not always a guaranteed outcome. Although the short-term work of getting a solution memorialized through legislation is sometimes painstaking, the resulting certainty can last for many years.

Reference
1. NIST releases findings on increasing the innovation impacts of federally funded R&D [news release]. Gaithersburg, MD: National Institute of Standards and Technology; April 24, 2019. www.nist.gov/news-events/news/2019/04/nist-releases-findings-increasing-innovation-impacts-federally-funded-rd.

The Specialty Pharmacist's Role in Educating Patients about Biosimilars and Biologics

Ron Lanton III, Esq., discusses the specialty pharmacist's role in educating patients about biosimilars and biologics on the following link: https://www.pharmacytimes.com/news/the-specialty-pharmacists-role-in-educating-patients-about-biosimilars-and-biologics

Below is the text of the interview.

Specialty pharmacies really can help the patient in getting the education out about biologics and biosimilar products in a number of different ways. First of all, the specialty pharmacy is very educated about what products are out on the market, and they’re in close communication with the physician. It’s also going to depend on the formulary and whether or not the pharmacy benefit manager or the carrier is actually going to carry the drug on the particular formulary. So I think if it does, I mean, obviously they don’t know everything about the patient’s formulary but they can find out that information and then see whether or not that’s good for the patient to take, as far as cost and outcomes-wise. So I think that with the specialty pharmacist being positioned in the center of everything, it’s a great position to be in for them to say, ‘Look, this is coming down. This is something I think that can help you, and let’s try and see if we can lower your costs and improve your outcome.’

The Challenges to Launching Biosimilars

Check out Ron Lanton’s interview with Specialty Pharmacy Times on “The Challenges to Launching Biosimilars” https://www.pharmacytimes.com/news/challenges-to-launching-biosimilars

Below we have provided the text from the interview as well:

Ron Lanton III, Esq.: Well, there are a few challenges to launching biosimilars after approved. One I can think of is litigation. So there’s been constant litigation between the biologic and the biosimilar to make sure that there is some kind of market exclusivity. So that’s the first thing. The second thing is that the biosimilars are actually fighting the patent thicket, so the biologic or innovator product is throwing up a lot of patents to keep the biosimilar off of the market, so you’re having a fight about that. I think education—so physicians, patients, they’re not really knowing too much about biosimilars and what some of these biological products are and kind of use them interchangeably because they don’t know about either/or. So I think a little bit more education is key, and I know that the FDA has been trying to put out a lot of policies recently to get more utilization out of this to drive down the cost of medication.

Is the Insulin Price Reduction Act the Right Answer to High Insulin Prices?

I have a new article in The Centers for Biosimilars titled Is the Insulin Price Reduction Act the Right Answer to High Insulin Prices? You can find the article by clicking on the following link: https://www.centerforbiosimilars.com/contributor/ron-lanton-III-esq/2019/10/is-the-insulin-price-reduction-act-the-right-answer-to-high-insulin-prices

If you cannot access the link above, I have put the text of the article below.

At this point in the legislative calendar, it is time to take a look at what may have a likely shot at passing Congress before the 2020 election season gets underway. With the contentious debate on drug pricing that has occurred during the last several months, insulin pricing is still garnering plenty of attention.

This summer saw the unveiling of bipartisan legislation aimed to deliver a policy solution to rising insulin prices. Titled the Insulin Price Reduction Act, otherwise known as S.2199, the proposed legislation sponsored by Senators Tom Carper, D-Delaware; Jeanne Shaheen, D-New Hampshire; Susan Collins, R-Maine; and Kevin Cramer, R-North Dakota, seeks to hold payers, manufacturers, and pharmacy benefit managers accountable for insulin price increases.

According to Senator Carper’s press release, the bill would create a new insulin pricing model “where the use of rebates would be restricted for any insulin product for which the manufacturer reduces the list price back to a level no higher than the price of the product in 2006. For the most popular insulins, this would result in more than a [75%] decrease in prices compared to what we can expect to see in 2020. These rebate restrictions would apply in Medicare Part D and the private insurance market. Private insurance plans would also be required to waive the deductible for insulin products that met the list price reduction criteria. To keep these rebate exemptions and deductible waivers in future years, the manufacturer would have to limit any list price increase to no more than medical inflation.”

The bill does have support from industry stakeholders. This bill has been endorsed by the JDRF, the American Diabetes Association (ADA) and the Congressional Diabetes Caucus, and the need for insulin access is there. According to the ADA, “Between 2002 and 2013, the average price of insulin nearly tripled. For more than 7.4 million Americans, including all individuals with type 1 diabetes, insulin is a life-sustaining medication for which there is no substitute.”

While having stakeholder support is important, it is not the only factor that determines whether this bill advances. There are several bills in Congress proposing similar solutions to insulin pricing, on top of FDA’s interest in lowering insulin prices via the development of biosimilar and interchangeable insulin products. Not to mention the fact that the US Department of the Treasury has implemented guidance aimed at making chronic medication access easier for beneficiaries with High Deductible Health Plans that include Health Savings Accounts.

While the bill is bipartisan, it would help if more senators from both sides signed on to show broadening support. However, with the looming election season, it remains questionable whether both sides can agree on if the Insulin Price Reduction Act is the right vehicle to lower insulin prices.

Specialty Pharmacy Times Interviews Ron Lanton on the Prescription Drug Price Relief Act

Watch Ron Lanton’s video with Specialty Pharmacy Times, as the Times gets his viewpoints on the pending Prescription Drug Price Relief Act.
https://www.pharmacytimes.com/news/prescription-drug-price-relief-act-of-2019

Here is the text of the interview:

The Prescription Drug Price Relief Act, that’s an interesting bill. Right now, it’s pending in Congress. It’s in the Senate HELP committee—the Health, Education, Labor, and Pensions Committee, otherwise known as Senate HELP. It’s sponsored by Bernie Sanders. And I’ve never seen this type of a bill before because what it does is it takes the IPI—the International Pricing Index—and it makes it a little bit more succinct. So the administration earlier had a blueprint where it talked about taking a drug and actually benchmarking it against 16 other countries, and this particular bill benchmarks the drug against 5 different countries. So it makes it a little smaller and more manageable to figure out how is the reimbursement going to be. What is interesting about this bill is that it has a couple of elements in it really aimed at drug pricing control and trying to get more generics and biosimilars out into the marketplace and, again, spelling out that IPI. What is interesting, though, is that it has 6 co-sponsors to it, and 5 of them are actually running for president, so I don’t think I’ve ever seen anything like this before. I’m not really sure if this is a bill to make a statement on, as the debates go, to maybe shape a future platform, or whether this is something that they’re going to continue to push. But if they do, they’re running out of legislative calendar time so that’s something to be mindful of.

California’s Consumer Privacy Act Could Be Coming to a State Near You

Oftentimes policy changes that sweep across the nation originate in policy “hot spots” like Massachusetts, California, New York, etc. This time its consumer privacy. As we rely more and more on the internet of things, artificial intelligence and fitness applications, we are unfortunately becoming more exposed to potential data breaches. If you operate in California, the California Consumer Privacy Act (CCPA) will be a defining factor in how you manage risks around consumer data. Approximately 500,000 businesses across all business sectors will have to comply with CCPA once the act goes into effect on January 1, 2020. 

So what is the CCPA? Passed in 2018 as AB 375, the Act models itself on Europe’s General Data Protection Regulation that went into effect recently. The bill awards California residents with the right to be informed on how companies collect and use their data. The law also allows their personal data to be deleted. CCPA creates a sliding scale approach by applying to California businesses who generate an annual gross revenue of $25 million with half of their annual revenue deriving from selling consumer information, or by companies that buy, sell or share personal information from at least 50,000 consumers, households or devices. 

Recently, the California legislature passed five bills seeking to amend CCPA in which Governor Gavin Newsom (D-CA) has until October 13, 2019 to sign or veto the legislation. Additionally, the state attorney general is expected to release draft regulations by the end of the year. Interestingly, an economic impact assessment prepared by a third party for the California Attorney General’s office stated that the new law could cost companies a total of up to $55 billion in initial compliance costs. 

So what is this important? Our society’s reliance on connectivity is not slowing down. The very companies that many of us interact with on a daily basis such as Amazon, Twitter and Facebook find themselves at the center of how they will comply with CCPA. But while this can be explained away as something that impacts only California, I have seen this type of legislation starting to spread to a cluster of other states. 

If you traffic in data, it will be a good idea to take inventory of your operational risks and whether your company will be able to comply if a similar law is enacted in your state. If you need assistance with regulatory compliance or are interested in finding out how your company can best engage with policymakers on this issue, don’t hesitate to reach out to us at either Lanton Strategies or Lanton Law.

Cannabidiol Made Simple

This article appeared in Specialty Pharmacy Times.

Cannabidiol (CBD) has certainly drawn significant attention over the past few months. Marked by the recent passage of the Farm Bill and the FDA’s hearing on CBD at the end of May, the curiosity about and demand for the products have never been stronger. Unfortunately, misinformation on the effects of CBD remains rampant, including details on whether combining CBD with food affects the body’s absorption and conflicting reports on the various differences in state regulation.

This article examines the basis of CBD use in health care along with the recent major regulatory discussions surrounding this emerging trend.

Market Trends
Market projections for CBD have varied widely. A study by cannabis investigators BDS Analytics and Arcview Market Research projected the collective market for CBD sales to exceed $20 billion in the United States by 2024. The study also showed that US retail sales of CBD consumer products in 2018 were between an estimated $600 million and $2 billion. The investigators estimated that CBD products could generate approximately $16 billion in retail sales by 2025.1

What Is CBD?
According to the FDA, “Cannabis is a plant of the Cannabaceae family and contains more than 80 biologically active chemical compounds. The most commonly known compounds are delta-9-tetrahydrocannabinol (THC) and cannabidiol (CBD). Parts of the Cannabis sativa plant have been controlled under the Controlled Substances Act (CSA) since 1970 under the drug class ‘Marihuana’ (commonly referred to as ‘marijuana’) [21 U.S.C. 802(16)].”

The FDA classifies marijuana as a schedule I drug under the CSA because of a high potential for abuse, largely attributable to the psychoactive effects of THC and a lack of agreement on acceptable medical use in the United States.2

CBD Regulation
The passage of the 2018 Farm Bill, also known as the Agriculture Improvement Act of 2018, reauthorized many expenditures from the Agricultural Act of 2014. Enacted on December 20, 2018, the law deemed hemp a legal substance and set the THC threshold of CBD products to 0.3% on a dry weight basis.2

Most important, the law maintains the FDA’s authority to regulate cannabis and its derivatives, as any product claiming therapeutic benefits derived from CBD requires FDA approval for its intended use before going to market. The Farm Bill stated that significant shared state–federal regulatory power over hemp cultivation and production will be instated. State departments of agriculture must consult with their governors and chief law enforcement officers to devise a regulatory plan to submit to the secretary of the US Department of Agriculture (USDA) for approval. Hemp cultivators in states that opt not to devise a program will need to apply for licenses and comply with a federally run program constructed by the USDA.

Before the passage of the Farm Bill, CBD took a major step forward with the FDA approval of Epidiolex. On June 25, 2018, the oral solution was approved for the treatment of seizures associated with 2 rare and severe forms of epilepsy, Lennox-Gastaut syndrome and Dravet syndrome, in patients 2 years and older. This was the first FDA-approved drug containing a purified substance derived from marijuana. It was also the first FDA approval of a drug for the treatment of patients with Dravet syndrome.3

What is happening in state legislatures? Thirty-four states, the District of Columbia, Guam, Puerto Rico, and the US Virgin Islands have approved comprehensive medical marijuana programs, and 12 states allow the use of products containing low THC and high CBD for medical reasons in limited situations or as a legal defense, according to the National Conference of State Legislatures. Furthermore, as of June 5, 2019, 13 states and territories have approved the adult use of cannabis.4

On May 31, 2019, the FDA held a public hearing to gather information from industry stakeholders on the use of CBD in cosmetics, dietary supplements, and food. The FDA made no new regulatory announcements, as the agency recognized that further discussion is needed before it can determine the appropriate regulatory pathway for these products. This point was emphasized by former FDA Commissioner Scott Gottlieb, MD, who outlined the need for a high-level internal agency to explore potential pathways for dietary supplements and/or conventional foods containing CBD to be lawfully marketed. He also emphasized the need to find answers to frequently asked questions to help the public understand how the FDA’s requirements apply to these products, as well as next steps for the FDA.

What Is Next for CBD?
Pharmacy professionals should monitor statements from the FDA in the immediate future to see how it intends to regulate CBD. Further, they can glean regulatory insight by examining warning letters, such as the 3 recent warnings the agency sent to companies making unsubstantiated claims regarding the ability of their products to limit, treat, or cure cancer, neurodegenerative conditions, autoimmune diseases, opioid use disorder, and other serious conditions without sufficient evidence and legally required FDA approval.

The USDA’s Agricultural Marketing Service (AMS) is another place to look for clues to CBD oversight. Earlier this year, the AMS issued a notice to trade over hemp production and cultivation. Cannabis-based stocks such as GW Pharmaceuticals, OrganiGram, Tilray, and the Canopy Growth Corporation could offer further insights into how the FDA will regulate this industry.

However, my closing advice for retailers looking to enter this market is to learn how your hemp products are created, processed, and tested for contaminants, because no uniform standard exists. Lastly, I would advocate for the use of counsel to ensure that the products you wish to sell comply with current FDA regulations and to help you understand the different state regulatory requirements surrounding CBD.

References

1. U.S. CBD market anticipated to reach $20 billion in sales by 2024 [news release]. Boulder, CO: BDS Analytics; May 9, 2019. bdsanalytics.com/u-s-cbd-market-anticipated-to-reach-20-billion-in-sales-by-2024. Accessed June 8, 2019.

2. FDA regulation of cannabis and cannabis-derived products: questions and answers. FDA website. fda.gov/news-events/public-health-focus/fda-regulation-cannabis-and-cannabis-derived-products-questions-and-answers. Updated April 2, 2019. Accessed June 8, 2019.

3. FDA approves first drug comprised of an active ingredient derived from marijuana to treat rare, severe forms of epilepsy [news release]. Silver Springs, MD: FDA. www.fda.gov/news-events/press-announcements/fda-approves-first-drug-comprised-active-ingredient-derived-marijuana-treat-rare-severe-forms. Accessed June 8, 2019.

4. State medical marijuana laws. National Conference of State Legislatures website. ncsl.org/research/health/state-medical-marijuana-laws.aspx. Published June 5, 2019. Accessed June 8, 2019.

How Will the United States–Mexico–Canada Agreement Affect Biosimilars?

This article appeared in The Center for Biosimilars.

For years we have witnessed the fierce debate over whether the North American Free Trade Agreement (NAFTA) is serving the best interests of the United States. In following up on a 2016 campaign promise to renegotiate NAFTA, the new NAFTA, called the United States–Mexico–Canada Agreement (USMCA), is currently being debated by Congress, and there are concerns as to whether the agreement will be ratified.

Since Democrats control the House, Speaker Nancy Pelosi, D-California, is a major factor in determining how fast this agreement moves through Congress. One of the major Democratic points of concern is how prescription drugs, namely biologics, are handled in the USMCA.

The point of contention for biologics occurs in the agreement’s exclusivity period. Biosimilar manufacturers have raised concerns about the fact that the USMCA would award biologic manufacturers 10 years of market exclusivity.

The USMCA would not change the current biologic exclusivity in the United States. According to the current US law, “With regard to protecting new biologics, a Party shall, with respect to the first marketing approval in a Party of a new pharmaceutical product that is, or contains, a biologic, provide effective market protection...for a period of at least ten years from the date of first marketing approval of that product in that Party.”

However, the USMCA would raise the exclusivity timelines in Canada and Mexico, which could impact biosimilar manufacturers operating in those markets.

Supporters argue that the exclusivity period doesn’t change existing US law, innovators need time to recoup research and development costs, and drug costs may be reduced in the United States, since subsidization would be reduced due to the expansion of biologic exclusivity in Mexico and Canada.

USMCA critics, however, argue that the Administration’s Blueprint to Lower Drug Prices featured greater biosimilar utilization, and the USMCA contradicts this goal. The Association for Accessible Medicines (AAM) argues in its position that the “USMCA expands the definition of biologics, doubling exclusivity for certain medicines” and “expands the scope of drug exclusivities beyond US law.” According to AAM, “All of these issues should be conformed to the US Hatch-Waxman Amendments and the Biosimilars Law [the Biologics Price Competition and Innovation Act].”

So where does all this leave us? Negotiations between the Democrats and the Administration’s trade czar, Robert Lighthizer, continue. Going into an election year, the USMCA could serve as political fodder. Democrats may use this to criticize the President’s foreign policy while the President could make good on his threat to invoke the 6-month notice period and withdraw from NAFTA, but that action could be risky, since the economic effects are unknown going into 2020’s election.

One thing is certain; prescription drug prices remain a potent political issue where change has been called for by the electorate. Will the USMCA’s current form be enough or will further changes be realized?

2 Bills, 1 Goal: Lower Drug Prices Through Biosimilars

This article appeared in Biosimilar Development

Just prior to an election season, it is not surprising to see a few bills emerge as potential silver bullets to solve pressing policy issues. The latest issue that has consumed the public for several years is how to lower drug prices. While policymakers have raised a series of threats to the industry, such as having Medicare negotiate drug prices, getting rid of drug rebates, and the specter of importation, none of these threats have yet to materialize into any meaningful legislation. What has remained consistent is the intrigue of biosimilars and whether finding ways to increase their utilization in the market could provide the elusive key to lowering drug costs. Two Congressional bills have recently emerged illustrating this desire.

The first bill is H.R. 3991, titled the Affordable Prescriptions for Patients Through Improvements to Patent Litigation Act. This bill is sponsored by Congressman Hank Johnson (D-GA), who serves as the chair of the House Judiciary Subcommittee on Courts, Intellectual Property, and the Internet (the IP Subcommittee), while Ranking Member Martha Roby (R-AL) is serving as cosponsor. The bill proposes to amend the patent dance process detailed in the Biologics Price Competition and Innovation Act of 2009 (BPCIA). Specifically, the bill would limit the number of patents that can be claimed by the reference product sponsor to 20 and also require that not more than 10 of those 20 patents shall have issued after the date the innovator sends the initial patents allegedly infringed on by the biosimilar. Exceptions can be made by a court of law overseeing the matter at issue.

Congressman Johnson stated his intentions for the bill in the bill’s press release. According to the release, “while the BPCIA was designed in part to expedite the pathway for new versions of previously marketed biologic drugs, the current regime for addressing patents that may cover biosimilar drugs -- which are much more complicated and costly to bring to marker than small-molecule drugs -- is like a clogged artery.” The Congressman stated, “By streamlining and simplifying the patent litigation process, we hope to help boost an already robust biosimilar application process and help to expeditiously make these life-saving drugs affordable to every consumer.”1

While the intent of the bill is good, there are two things that concern me. First is the lack of additional cosponsors. While there is no magic number of cosponsors necessary for a bill to move, more support for the bill is needed to create the necessary momentum to get a vote on the House floor. Having more Congressional sponsors will increase awareness about the need to change the law to avoid more biosimilars being bogged down by “delay tactic” litigation. Second, the legislative calendar is working against this bill. While there is still time left before this Congress adjourns, we are headed into the fall before election season, where momentum for pending bills slows to a crawl, since legislators are less inclined to rock the boat for fear of looking less favorable in the public’s eyes prior to re-election. Politics are a real factor and unless something happens that shines the light on the need for biosimilars to come into the market faster, without additional sponsors it will be hard to see this bill advancing anytime soon.

The other relevant bill is The Prescription Drug Pricing Reduction Act (PDPRA) of 2019, which is sponsored by Senators Grassley (R-IA) and Wyden (D-OR). This bill, which is aimed at lowering prescription drug prices, has advanced out of the Senate Finance Committee and will be considered by the full Senate this fall. While this bill covers several issues, it does address a few issues concerning how biosimilar use will lower drug prices. Below are a few relevant provisions from the act:

The proposal would require prescription drug, biological, and biosimilar manufacturers that do not have a Medicaid drug rebate agreement to report average sales price (ASP) information to the HHS secretary, which would be used to help establish Medicare payment rates. These manufacturers would be required to report quarterly ASP information beginning with the first calendar quarter after the date of enactment.

• The proposal would require prescription drug, biological, and biosimilar manufacturers to exclude the value of coupons provided to privately insured individuals from each drug’s ASP, as reported to the HHS secretary. This provision would apply to manufacturers’ product sales for calendar quarters beginning on July 1, 2021. This provision would define coupons to mean financial support provided by a manufacturer to a patient, either directly or indirectly, specific to the manufacturer’s drug through a physician, prescriber, pharmacy, or other provider that is used to reduce or eliminate cost sharing or other out-of-pocket costs, including costs related to a deductible, coinsurance, or copayment. Manufacturers would not have to exclude contributions to patient assistance programs or foundations, which are generally provided to patients based on need and are not specific to the contributing manufacturer’s drug.

• The proposal would establish a wholesale acquisition cost (WAC) add-on payment of no greater than plus 3 percent when ASP is unavailable for new drugs, biologicals, and biosimilars furnished on or after Jan. 1, 2019.

• The proposal would establish a payment rate for biosimilars furnished on or after July 1, 2020 for the roughly two-quarter initial period that would be the lesser of: (1) the biosimilar’s WAC plus 3 percent; or (2) ASP plus 6 percent of the reference biological product.

• Lastly, to encourage biosimilar product development, the proposal would increase the add-on payment for a biosimilar biological product from 6 percent of the reference product’s ASP to 8 percent of the reference product ASP for a period of five years. The temporary add-on payment increase would apply to a biosimilar: (1) paid for by Medicare as of Dec. 31, 2019, for a five-year period beginning Jan. 1, 2020; and (2) paid on or after Jan. 1, 2020, for a five-year period that would begin on the first day of the first calendar quarter in which the product was paid for under Medicare Part B.

Needless to say, there is a lot going on in this proposal. It is clear that the sponsoring senators want to get drug prices under control and policymakers such as Congress and the Medicare Payment Advisory Commission (MedPAC) have been floating proposals for a few years now on how reigning in the ASP calculation would save the system money. While this proposal in theory sounds feasible, I fully expect there to be pushback from the industry on any reductions in reimbursement. This is on top of the contentious fight the pharmacy benefit managers (PBMs) put up against coupons and, seeing that this language includes that, I question whether all of this can get done. The difference between this bill and Congressman Johnson’s is that the Senate bill has more support than the Congressional bill.

There is no doubt that the remainder of the year will focus on last-minute policy initiatives to beat the winding down of the legislative calendar. After all, with so much on the line for the election of 2020, members of Congress must be able to go back to their districts and show how they have addressed major constituent issues such as high drug prices. While biosimilars do hold a lot of theoretical promise, we need more policies to help them get into the market faster to see if and whether we need additional tweaks for the drug price savings that many are hoping to achieve with biosimilars.

References:

Rep. Johnson Introduces Bipartisan Legislation to Lower Prescription Prices, Press Release July 26, 2019, https://hankjohnson.house.gov/media-center/press-releases/rep-johnson-introduces-bipartisan-legislation-lower-prescription-prices