HealthCare Roundtable e-News – Jan. 13, 2017

Republicans Start ACA Repeal Process; Trump Talks up Health Care Plan

Republican lawmakers started the process of repealing the 2010 Patient Protection and Affordable Care Act (ACA), passing a budget resolution that directs congressional committees to begin drafting legislation that repeals major portions of the law.

The Senate passed the resolution 51-48 on Jan. 12 and the House approved it 227-198 the following day. One Republican senator – Rand Paul of Kentucky – voted against it, as did all Democrats (plus the two independents who caucus with them) in that chamber, while nine GOP congressmen joined all Democratic members of the House of Representatives in opposition.

The measure does not go to the president for his signature and does not have the force of law, but Republican leaders hailed the votes as the beginning of a process they have waited almost seven years for.

“This is a critical first step toward delivering relief to Americans who are struggling under this law,” Speaker of the House Paul Ryan said. “Our goal is a truly patient-centered system, which means more options to choose from, lower costs and greater control over your coverage. And as we work to get there, we will make sure that there is a stable transition period so that people don’t have the rug pulled out from under them.”

The few Republican holdouts expressed concerns about moving ahead with the repeal process before the party has a replacement plan ready.

“I’m much more concerned about the content than the timing,” Rep. Tom MacArthur, R-N.J., said of his no vote. “I think we’re going a little too fast.”

House Minority Leader Nancy Pelosi, D-Calif., agreed, but in a much more critical manner.

“They talk about repeal and replacing,” Pelosi said. “For six years, they have had a chance to propose an alternative. We see nothing.”

A year ago, the GOP-controlled Congress used the budget reconciliation process to pass a bill that, among other things, would have repealed major portions of the ACA, including the law’s individual mandate, employer mandate, “Cadillac tax” on high-value health insurance plans, 2.3 percent medical device tax, creation of the Medicare Independent Payment Advisory Board, and expansion of Medicaid eligibility.

President Obama vetoed the bill, but Republican lawmakers had demonstrated that they could get a repeal bill to the president’s desk, since budget reconciliation legislation does not allow for filibusters and, thus, requires only a simple majority of votes to get through the Senate. Republican leaders have indicated that repeating this process will be one of their priorities once Trump takes office on Jan. 20.

Most Republicans appear to be unwilling to simply eliminate the ACA without providing alternatives for the 20 million people who, it is estimated, would lose coverage following repeal. It is unclear if GOP lawmakers plan to package their own – yet to be determined – health care reform plan with repeal legislation, pass their plan separately but soon after repeal, or pass repeal legislation and delay the effective date – possibly for several years – while they develop a plan. The last option, though, carries the risk of creating long-term uncertainty that could destabilize the insurance market.

Trump, meanwhile, said that his incoming administration is “down to the final strokes” in the development of its own health care reform proposal. While he offered no details, he said that it would provide “insurance for everybody” and “much lower deductibles.”

“There was a philosophy in some circles that, if you can’t pay for it, you don’t get it,” Trump said in an interview with The Washington Post. “That’s not going to happen with us. [People] can expect to have great health care. It will be in a much simplified form. Much less expensive and much better.”

Trump also vowed that, under his plan, there would be no Medicare cuts and pharmaceutical companies – who he said have been “getting away with murder” – would have to negotiate with the federal government over the prices of drugs covered by Medicare.

“Pharma has a lot of lobbies, a lot of lobbyists and a lot of power, and there’s very little bidding on drugs,” Trump said separately from the Post interview. “We’re the largest buyer of drugs in the world, and yet we don’t bid properly.”

Several of these statements could lead to conflicts with many GOP lawmakers who do not seek to ensure universal coverage through a government program; often argue that increased out-of-pocket costs – as from higher deductibles – make people better consumers of health care, which can bring down prices; support Medicare reform; and oppose allowing the federal government to negotiate drug prices with manufacturers.

Top of page

FDA Recommends Unique Names for Biosimilars

Biosimilars should use names that are different from their reference products, according to guidance released on Jan. 12 by the Food and Drug Administration (FDA).

Biologic drugs are expensive, highly advanced medicines that are derived from biological processes, and biosimilars are their generic versions. The FDA has approved four biosimilars so far.

Developing naming standards for biosimilars has been a controversial topic, with the Public Sector HealthCare Roundtable and others arguing that generic biologics should have the same nonproprietary name as their brand-name reference products in order to avoid confusion that could diminish the use of biosimilars. Brand-name companies, though, say that the names should be distinct, since the formulations, while very similar, are necessarily different.

The FDA’s guidance directs that a biosimilar’s name should be the name of the drug’s core substance – the nonproprietary name that the biosimilar has in common with its brand-name reference product – followed by a unique four-letter suffix. These suffixes – which the FDA says should be “devoid of meaning,” despite proposals that they be somehow related to the product, such as using “sndz” for a drug produced by Sandoz – are the part of the name that differentiates biosimilars from their reference products.

“This naming convention will facilitate pharmacovigilance for originator biological products, related biological products, and biosimilar products containing related drug substances when other means to track a specific dispensed product are not readily accessible or available,” the guidance states. “Distinguishable nonproprietary names will also facilitate accurate identification of these biological products by health care practitioners and patients. Further, distinguishing suffixes should help minimize inadvertent substitution of any such products that have not been determined to be interchangeable.”

Companies applying for FDA approval of a biosimilar may submit as many as 10 proposed suffixes for the drug.

The recommendations – which are nonbinding but likely to be followed – are largely unchanged from draft guidance that the FDA released in August 2015.

Two months after the draft guidance was released, the HealthCare Roundtable and 21 other organizations wrote to the FDA to state that they “strongly believe that biologics and biosimilars should be required to have the same” nonproprietary name, with no suffix added.

“As health care stakeholders, we are concerned that adding distinguishable suffixes to every biologic, biosimilar, and interchangeable biologic will confuse both providers and patients, and have the unintended effect of slowing the uptake of these cost saving products,” the letter stated. “The European biosimilar experience has clearly demonstrated that these products are safe and effective, and they have been adequately monitored without any alterations to the name of the active substance. The FDA proposal is a distinction in search of a difference that changes the [nonproprietary name] from a system that has a proven track record, of over 60 years, of ensuring patient safety and reducing the potential for confusion.”

Top of page

Supreme Court to Hear Biosimilars Case

The U.S Supreme Court has agreed to hear a case related to when biosimilars can be put on the market.

Biologic drugs are highly advanced medicines derived from biological, rather than chemical, processes. They are among the most innovative of drug treatments and, as such, are also among the most expensive, potentially costing tens, even hundreds, of thousands of dollars each year for a single patient. Generic biopharmaceuticals, known as biosimilars, would offer lower-cost alternatives – as with generic versions of traditional drugs – but there was no “pathway” allowing their approval by the Food and Drug Administration (FDA) until passage of the 2010 Patient Protection and Affordable Care Act, which included the “Biologics Price Competition and Innovation Act” (BPCIA), establishing 12 years of exclusivity for brand-name biologics.

The FDA in March 2015 approved its first biosimilar, Zarxio from Sandoz, which is intended to decrease the incidence of certain infections during chemotherapy. The reference product is Neupogen (filgrastim) by Amgen. In deciding a lawsuit filed by Amgen that unsuccessfully sought to block the release of Zarxio, a three-judge federal appeals court panel ruled that a biosimilar manufacturer must provide the brand-name company with 180 days pre-marketing notice, and this can only come after the FDA approves the biosimilar. Sandoz is asking the Supreme Court to reverse this aspect of the ruling, stating in its filing that, “the Federal Circuit turned this mere notice provision into a grant of 180 days of additional exclusivity for all biological products beyond the exclusivity period Congress expressly provided – delaying the launch of all future biosimilars by six months.”

The Supreme Court on Jan. 13 announced that it would take the case.

After the announcement, Sandoz stated on Twitter, “Patient access to #biosimilars could be improved by 6 months in the US as #USSupremeCourt has agreed to hear our case.”

The U.S. solicitor general had urged the court to accept the case, stating in a brief, “The timing of biosimilars’ entry onto the market was a significant issue addressed by the BPCIA, which prohibits FDA from making its approval of [a biosimilar application] effective before 12 years after the reference product’s first licensure. Given the expressly granted exclusivity periods, it is particularly unlikely that Congress would have further delayed biosimilars’ marketing in such an indirect manner.”

Even if the 180-day period after FDA approval remains in place, the issue is likely to disappear over time, as fewer drugs that are already close to the 12-year mark lose their exclusivity. With newer drugs, generic companies can file for FDA approval long before the reference products are near that threshold, allowing the 180 days to pass before the 12 years are up.

Top of page

2 Ex-Drug Executives Plead Guilty to Price Fixing

Two former pharmaceutical company executives pleaded guilty in federal court in Philadelphia on Jan. 9 to two felony charges that they conspired to fix the prices of two generic drugs.

Former Heritage Pharmaceuticals CEO Jeffrey Glazer and his brother-in-law, former Heritage Senior Vice President Jason Malek, admitted to charges filed by the Department of Justice (DOJ) that they conspired “to fix prices, rig bids and allocate customers for an antibiotic, doxycycline hyclate” between 2013 and 2015, and that they “conspired to fix prices and allocate customers for glyburide, a medicine used to treat diabetes” between 2014 and 2015.

Neither man commented on the charges in court or after their appearance.

A sentencing hearing is scheduled for April 10 for both men. They could each be sent to prison for as long as 10 years.

The DOJ has been investigating multiple drug companies, and more charges are expected. The documents charging Glazer and Malek stated that, “Various corporations and individuals, not made defendants in this Count, participated as co-conspirators in the offenses charged herein and performed acts and made statements in furtherance thereof.” The Philadelphia Inquirer reported that Glazer and Malek “are believed to be cooperating with federal investigators as focus shifts to larger firms and what role they may have played in the antitrust scheme.”

Heritage Pharmaceuticals, which has filed a civil lawsuit against Glazer and Malek, stated that it fired the two men in August “following an internal investigation that revealed a variety of serious misconduct” by them.

Heritage is named in a civil lawsuit filed by 20 state attorneys general in December that accuses six generic drug manufacturers of price-fixing. That lawsuit charges that Heritage was the “principal architect and ringleader” of a scheme that involved “entering into contracts, combinations and conspiracies that had the effect of unreasonably restraining trade, artificially inflating and maintaining prices and reducing competition in the markets” for the same two drugs named in the federal case.

The other companies named in the lawsuit are Aurobindo Pharma USA, Citron Pharma, Mayne Pharma (USA), Mylan Pharmaceuticals, and Teva Pharmaceuticals.

Top of page