FDA’s Gottlieb continues to amaze, turning agency into pharma-friendly ally.

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The News:

The US Food and Drug Administration on Monday (October 2, 2017) announced a series of measures designed to speed to market generic versions of complex drugs such as Mylan NV’s emergency EpiPen in an effort to quell the rising cost of pharmaceuticals.

The measures, announced in a blog post by Commissioner Dr. Scott Gottlieb, and first reported by Reuters, stray into a province that has not previously been the FDA’s purview: drug prices. The agency’s traditional role has typically been to ascertain safety and efficacy without regard to the cost, let alone eventual pricing by the drugmakers seeking marketing approval.

Gottlieb said the measures are designed to increase competition in the market by enabling generic competition to complex drugs, something he has long argued for.

“Drug access is a matter of public health concern,” Gottlieb said. “We know that enabling more generic competition, where Congress intended, helps reduce prices, enable more access, and improve public health.”

Complex drugs include medicines like metered-dose inhalers to treat asthma that have at least one feature difficult to copy under existing rules, which means those drugs can face less competition.

“In some cases, costly, branded drugs that are complex drugs have lost their exclusivity but are subject to no generic competition,” Gottlieb said.

Mylan, which faced an uproar over the escalating price of the EpiPen last year, culminating in a congressional hearing on the matter, has itself complained about getting its own versions of complex drugs onto the market, including its copy of GlaxoSmithKline PLC’s Advair asthma treatment.

Steve’s Take:

New FDA Commissioner Scott Gottlieb continues to amaze and impress me, despite being appointed to the powerful drug regulator by Donald Trump. In fact, among all the Trump administration appointees to date, he stands out as the one most capable of serving in the agency he was chosen to lead. And boy is he breaking with tradition in a serious way.

What’s so novel about the changes Gottlieb is fashioning at the FDA, you ask?

Let me offer a parallel dating back to my stint with the IRS National Office where I worked in the rulings division of a particular industry. Companies would appear before us and lay out a proposed transaction seeking a ruling that the tax ramifications were highly favorable to the company.

We would pick it apart, sometimes showing how hideous the resulting taxes/penalties would be, and they would leave, and usually come back with another structure, and another…you get the point. That’s what regulatory agencies are supposed to do, right?

Not Dr. Gottlieb. You see, the commissioner is building a new and very nontraditional approval pathway for companies in his efforts to reduce high drug prices. He’s starting by encouraging development of generic versions of the really-hard-to-make medicines.

Steve's Take: @SGottliebFDA is building nontraditional way to reduced high #drugprices Click To Tweet

And he’s in effect saying to companies, “Bring us your applications for a generic version of a hard-to-make drug and WE will show you how to get it approved!” Definitely not the IRS approach, or the FDA approach for that matter, prior to his appointment.

Why start with the hard-to-makes? Well, complex drugs and drug-device combinations generally are very expensive and some are widely used, ABC Health points out. Often, they don’t get generic competition right after their patent expires, as happens routinely with pills. Difficulty in creating copies or near-copies of such drugs and getting them approved can deter generic companies from even trying, Gottlieb wrote in a blog post.

That means patients don’t get access to cheaper versions of those drugs and the brand-name medicine makers continue to ring the cash register, often to the tune of billions of dollars a year, per drug.

Simply put, to get more generic versions of complex drugs on the market, the FDA will begin giving companies guidance on how to win approvals, including offering meetings with agency staff early on, to shorten the time for development and approval. Talk about nontraditional.

Examples of older complex drugs cited by Gottlieb that still lack generic competition include the Advair inhaler and injected medicines Forteo for osteoporosis, Victoza for high blood sugar and Copaxone for multiple sclerosis. Their monthly costs without insurance range from about $400 for Advair to up to $5,200 for Copaxone. A generic version of Copaxone was approved in 2015, but it’s not yet on sale because the maker hasn’t met FDA’s manufacturing standards.

“This is a shot across the bow” to the brand-name companies, said analyst Steve Brozak, president of WBB Securities.

Gottlieb’s close ties to drugmakers worried consumer groups when he was nominated. Now, Brozak said, he’s telling brand-name drugmakers to focus on developing new drugs, not wringing extra money out of blockbusters long on the market, while encouraging generic makers.

“Nothing in health care is instantaneous,” Brozak said, but Gottlieb “is starting to build a road map for how to prove a generic is equivalent to a complex brand-name drug.”

Longer-term plans include coming up with new, better tools to determine if a proposed facsimile of a complex injected drug really will affect patients the same way.

Reducing the time and cost it takes to develop a drug would also lower drug prices, Gottlieb said last month. If drugmakers used combined-phase–also called “seamless”–trials, rather than the traditional three phases of study, they would save time, cut costs, and reduce the number of patients who must enroll.

Seamless trials are increasingly being used for oncology drugs, and the FDA’s Oncology Center of Excellence is taking steps to better evaluate and cultivate this approach, Gottlieb told attendees at a conference hosted by the Regulatory Affairs Professionals Society.

The pharmaceutical industry generally supports the idea of seamless clinical trials.

Bottom Line:

Developing a new drug takes 10 to 15 years and costs an average of $2.6 billion, Andrew Powaleny, director of public affairs at the Pharmaceutical and Research Manufacturers of America (PhRMA), told Bloomberg BNA.

Mace Rothenberg, chief development officer of oncology for Pfizer Inc.’s global product development group, told Bloomberg, “We’re delighted that Commissioner Gottlieb identified this as an area of exploration.”

It’s important to recognize that the cost of drug development isn’t the only factor driving drug prices, Rothenberg continued. He said the drug’s impact also is considered when setting its price, such as whether the drug delays disease progression, prolongs life, or cures a disease.

Companies also consider the impact of the drug on the overall healthcare system when setting the price, Rothenberg said. So even though some drugs have a hefty price tag, they could be replacing a less effective treatment and the new drug could shorten hospitalizations, he said. Examples of this would be drugs that treat hepatitis C or diabetes.

Prior to his appointment, Commissioner Gottlieb worked on both sides of the regulatory fence, so he knows who’s making a valid point about the drug-cost issue and who’s merely posturing to protect or enhance a purely proprietary interest. He’s doing a splendid job, and hopefully will stay out his commander-in-chief’s crosshairs, unlike most other Trump appointees.

Oh, and Gottlieb only flies commercial airlines. Could he be Tom Price’s replacement at HHS?

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