Gottlieb Addresses Drug Pricing Reforms
FDA commissioner Scott Gottlieb continues to use his bully pulpit to rail against the pharmaceutical industry and its increasing drug costs for American consumers. While the agency has a minimal role in impacting drug costs outside of fostering competition in the generic drug space, Gottlieb nevertheless took the opportunity during the commissioner’s annual address before the Food and Drug Law Institute’s (FDLI) annual meeting in Washington, DC 5/3 to lash out against drug pricing.
Gottlieb told FDLI that FDA is “committed to maintain the U.S. position as the best place to invest, develop, and commercialize innovative medicines. But for our system to continue to work, innovation has to be balanced with competition and access. Let’s face it: Right now, we don’t have a truly free market when it comes to drug pricing, and in too many cases, that’s driving prices to unaffordable levels for some patients.”
Gottlieb told FDLI that President Trump and HHS secretary Alex Azar will soon unveil a plan to lower drug prices. “To take one example,” he said, “one of the dynamics I’ve talked about before that’s driving higher and higher list prices, is the system of rebates between payers and manufacturers. And so what if we took on this system directly, by having the federal government reexamine the current safe harbor for drug rebates under the Anti-Kickback Statute? Such a step could help restore some semblance of reality to the relationship between list and negotiated prices, and thereby boost affordability and competition. But beyond discounting, a web of rules and restrictions – some implemented as a result of industry lobbying – prevent truly market-based pricing and competition.”
Gottlieb’s address also raised the issue of drug companies gaming the system to block or delay generic competition. “I feel strongly that this is shortsighted,” he told FDLI. “It’s hard to defend the principle of market-based pricing if individual firms seek to use legal and political maneuvering to seek temporary advantage by gumming up the rules in their favor. I can tell you that the framework the secretary has developed will dismantle many of the provisions that shield parts of the drug industry from more vigorous competition. Part of this plan includes a series of changes to the pricing mechanisms in Part D. Taken together, these changes are a profound modernization of the program. It’ll put us more firmly on a footing to defend the idea that brisk competition should be the vehicle by which we seek to lower drug costs.”
To address abuses by branded firms that use FDA’s REMS programs to prevent generic developers from accessing their drugs for bioequivalence testing, Gottlieb said the agency is going to be unveiling a new guidance in the next few weeks to curb such practices. “And when firms play these games, it’s not just competition that suffers. It’s the entire public that suffers, including your clients,” he said. “They suffer reputational harm in a market that’s more aware of the harms caused by the delays to competition, and doesn’t look kindly upon these actions. They suffer the industry-wide, long-term consequences that come from undermining the careful balance between access and innovation struck by Hatch-Waxman and the other laws governing our framework for pharmaceutical development. If these tactics don’t abate, there’s a real risk that Congress and others will come to see our longstanding... approach to balancing innovation, access, and competition as a framework that’s no longer sustainable or worth supporting. That’s the risk that comes from an excessive focus on preserving incumbency rather than developing new innovations that’ll advance health, improve people’s lives, and also help grow the industry.”
Gottlieb’s address also discussed how CDER is modernizing the new drugs regulatory program. “We’re going to cluster certain review divisions to better reflect current and emerging understanding. And we’re going to take a new approach to documenting our reviews, developing a more integrated document to foster collaboration across disciplines.” he said. Our goal is to make drug review even more team-based, so that the skills of FDA staff who have expertise in discrete areas like statistics and modeling and simulation and advanced manufacturing can be more easily leveraged when it comes to novel trial designs — and more novel but promising development approaches — are brought to us.”
For medical devices, Gottlieb said similar reforms are being considered. “We want to focus more of our policy work on supporting product developers who are pursuing safer devices,” he said. “One way could be through a new program that’s similar to our Breakthrough Device Program. Under this approach, we’d provide greater interactions with developers and grant expedited review to their products where the key advantage is their enhanced safety over existing devices. We also want to make it easier for medical device manufacturers to make comparative safety claims about their products. In these ways, we want to stoke more competition around the principle of designing medical devices that might deliver equivalent benefits to currently marketed products, but offer these benefits in a way that has added measures of safety.”