The US Senate’s US$849 billion healthcare overhaul legislation, like the US House version, gives biologicals innovators 12 years of exclusivity and requires a 50% discount on negotiated prices for brand drugs in Medicare formularies when beneficiaries fall into a coverage gap. But unlike the US House bill, it would charge brand-drugmakers annual fees.

The Medicare Prescription Drug Plan Improvements (Part D imposes that in order to have their drugs covered under the Medicare Part D programme, drug manufacturers will provide a 50% discount to Part D beneficiaries for brand-name drugs and biologicals purchased during the coverage gap beginning 1 July 2010. The initial coverage limit in the standard Part D benefit will be expanded by US$500 for 2010.

To stimulate Biologics Price Competition and Innovation, the Patient Protection and Affordable Care Act establishes a process under which the FDA will license a biological product that is shown to be biosimilar or interchangeable with a licensed biological product, commonly referred to as a reference product. No approval of an application as either biosimilar or interchangeable is allowed until 12 years from the date on which the reference product is first approved. If the FDA approves a biological product on the grounds that it is interchangeable to a reference product, the US Department of Health and Human Services cannot make a determination that a second or subsequent biological product is interchangeable to that same reference product until one year after the first commercial marketing of the first interchangeable product.

The Pharmaceutical Manufacturers Fee provision imposes an annual flat fee of US$2.3 billion on the pharmaceutical manufacturing sector, beginning in 2010 and allocated across the industry according to market share. The fee does not apply to companies with sales of branded pharmaceuticals of US$5 million or less.

The Patient Protection and Affordable Care Act, H.R. 3590, must get 60 votes to open debate on it before the full US Senate votes whether to approve it.

References:
Senate healthcare bill preserves biologics exclusivity, drugmaker fees. FDAnews. 2009 Nov 23;6(228).

The Patient Protection and Affordable Care Act, H. R. 3590.

Dorgan BL, Chairman. H.R. 3590, the legislative vehicle for the Patient Protection and Affordable Care Act of 2009. Democratic Policy Committee. 2009 Nov 21.