The Unfinished Generic Drug Agenda

May 17, 2018

Expand Biosimilars, Report Patent Settlements and End REMS Abuses

New Pills

At a time of renewed focus by policymakers on prescription drug affordability, one area ripe for opportunity lies with ending brand manufacturers’ “evergreening” efforts that either block or delay generic drugs from coming to market. We agree with the Administration and Members of Congress from both sides of the aisle that expanding access to generic drugs, and biosimilars, is an important priority and that targeted legislative and regulatory reforms are urgently needed.

Express Scripts has helped our clients achieve a 90 percent generic-fill rate and improved outcomes for patients. The widespread use of generic drugs has enabled us to achieve a record-low drug trend of 1.5%. Generic drugs are a vital part of our larger clinical solutions that helped us save our clients $32 billion last year.

Expand Access to Biosimilars

Yet, more work is needed. In 2018, we expect specialty medications will account for just 1 percent of total U.S. prescriptions, but represent more than 50 percent of total U.S. pharmacy costs. The savings potential on these biologics is great, as 74 biologic drugs are expected to lose patent protection between now and 2021. With an expected cost of 15 percent to 40 percent less than originator products, biosimilars create a significant savings opportunity across the U.S. healthcare system.

The RAND Corporation, an independent research group, has identified the savings opportunities associated with expanded use of biosimilars. RAND has estimated the cost savings potential of biosimilars to be $54 billion over ten years, with a lower- to upper-bound range of $25 billion to $150 billion. Crucially, RAND notes that “the potential for cost savings will vary across biologic classes based on sales, the degree of competition, and the timing of biosimilar entry into the market.”

Express Scripts strongly supports requiring biosimilar manufacturers to provide the same rebates in the Medicare Part D “doughnut hole” paid by brand manufacturers, a policy which will ensure patient access to these lower-cost alternatives. We were pleased to see this important change enacted into law as part of the enacted February 2018 congressional budget legislation. We encourage lawmakers to preserve this important patient protection.

Require Reporting for Biosimilars Patent Settlements

Regulators and lawmakers have long paid attention to settlements between brand and generic drug makers that end patent dispute litigation, and these settlements must be filed with the Federal Trade Commission (FTC) and the Department of Justice (DOJ). No such requirement, however, exists for settlements between biologic and biosimilar manufacturers. Requiring these patent litigation settlements to be reported to FTC and DOJ will ensure that the agencies have the information needed to challenge anticompetitive agreements in federal court.

End REMS Abuses

Another area of opportunity lies with the Food and Drug Administration’s (FDA) Risk Evaluation and Mitigation Strategies (REMS). These programs provide an important protection for patient safety by ensuring that the benefits of a drug or biological product outweigh its safety risks.

Certain brand manufacturers, however, have exploited a loophole in the law to prevent generic and biosimilar competition for products both with and without REMS requirements. These manufacturers employ restricted distribution networks to deny generic and biosimilar manufacturers access to the product samples needed to obtain FDA approval. Some manufacturers have implemented these restricted distribution programs solely to delay competition, independently from any FDA mandates.

The FTC has cautioned that “this conduct may prevent the Hatch-Waxman framework from functioning as Congress intended.” FDA Commissioner Gottlieb has also correctly called to "end the shenanigans" that often delay or restrict generic drug competition.

Express Scripts strongly supports the Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act. This measure would address these anticompetitive practices by closing the loophole in the law and creating a clear pathway for generic and biosimilar manufacturers to access the sample products needed to bring lower-cost drugs onto the market. The increased generic and biosimilar competition provided by the CREATES Act would save the federal government $3.8 billion over 10 years.

Author Bio

Lab Staff
comments powered by Disqus