US President Barack Obama has announced proposals for fiscal year 2015 which aim to increase the availability of generics and biosimilars.
The budget for 2015 proposes that brand-name and generic drug manufacturers be prohibited from delaying the availability of new generics and biosimilars, as well as modifying the length of exclusivity to facilitate faster development of biosimilars.
Pay-for delay
The proposals in the 2015 budget would mean that, beginning in 2015, pay-for-delay agreements between brand-name and generic drugmakers would be banned. This, according to the budget proposal, would increase the availability of generics and biologicals by authorizing the Federal Trade Commission to stop companies from entering into anticompetitive agreements which block consumer access to safe and effective generics. This proposal it is believed would save the country US$9.1 billion in Medicare (national medical insurance programme) over 10 years, as well as producing savings for Medicaid (social healthcare programme for families and individuals with low income and resources).
Biologicals exclusivity
The 2015 budget proposal also intends to increase competition for biologicals by reducing the number of years of exclusivity that brand-name biologicals manufacturers can expect, from the 12 years foreseen in the Biologics Price Competition and Innovation (BPCI) Act to seven years. This is not the first time that President Obama has made this suggestion. This was already part of his plans back in his 2012 budget proposal [1].
The proposal also prohibits additional years of exclusivity due to formulation changes and modifies how Part B (supplemental medical insurance) pays for treatment where biosimilars are available by allowing originator drugs to be classified in the same category as their biosimilars. Reimbursement would be made based on the weighted average sales price. This proposal is estimated to save Medicare US$4 billion over 10 years, as well as producing savings for Medicaid.
Brand-name biologicals representative the Biotechnology Industry Organization (BIO) reacted with concern saying that the ‘proposal to reduce the period of regulatory data protection for innovative biologic[al]s manufacturers will discourage biotech innovation’. President and CEO, Mr Jim Greenwood added that ‘many of the provisions included in this budget proposal would jeopardize the continued biotech research and development that is necessary to find cures and breakthrough medicines for patients living with debilitating and life-threatening diseases.’
The Generic Pharmaceutical Association (GPhA) on the other hand welcomed the proposals in President Obama’s fiscal year 2015 budget. Mr Ralph G Neas, GPhA President and CEO said that the initiatives would ‘strengthen access for millions of patients to safe and affordable generic medicines’. The GPhA also estimated potential savings from use of biosimilars to be even higher, possibly in the region of US$250 billion over 10 years. They did, however, oppose the ban on patent settlements, arguing that patent settlements save consumers and taxpayers billions of dollars by allowing generics to enter the market before patent expiration.
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Reference
1. GaBI Online - Generics and Biosimilars Initiative. Exclusivity for biological drugs in the US: what now [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2014 Mar 21]. Available from: www.gabionline.net/Policies-Legislation/Exclusivity-for-biological-drugs-in-the-US-what-now
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Source: BIO, US Department of Health & Human Services, GPhA
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