Update – 3/5/2019 – The Washington Post is reporting that Commissioner Gottlieb is resigning. You can read about his resignation here.
By Craig Idlebrook/GluCraig
At the FDA/CMS summit in Washington D.C. today, FDA Commissioner Scott Gottlieb laid out a plan to increase competition and bring down the price of insulin. In his keynote speech, Commissioner Gottlieb said the FDA will recharacterize insulin as a “biologic” instead of a drug; work with the Federal Trade Commission against anticompetitive practices against biosimilar drugs; and smooth out the regulatory process for biosimilar insulin formulations.
Here are some key points and passages from his speech:
He believes generics are important for bringing down pricing.
He began the speech by praising the number of generic drugs have been approved by the FDA, but warned that many biosimilar drugs haven’t made it to market because of patent issues.
Competition, he said, is key to bring down the price of a drug: “FDA research shows that drug prices are directly related to the number of generic manufacturers in the market. The first generic competitor to market offers only a small discount to the branded product. But once three or more generic competitors enter the market, discounts can rise to 80 percent or more of the branded price.”
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He warns that drug-makers are gaming the system to block biosimilars and generics.
He criticized some drugmakers who he accused of using FDA regulations improperly to block other drugmakers from gaining samples of their patented products, thus blocking biosimilar (or biological copies) drugs from being developed. He was blunt about his feelings on this, saying that the Federal Trade Commission (FTC) may even be enlisted to examine this issue.
“We’re not going to be partners to these deceptions,” he said.
Insulin is essential, and the pricing for it troubles him.
These three passages from his speech speak for themselves:
“Access to affordable insulin is literally a matter of life and death for these Americans. This is a challenge, even though insulin was discovered nearly a century ago by a Canadian research team led by the orthopedic surgeon Frederick Banting in 1921. In 1923, Banting’s team was awarded a U.S. patent which the team sold to the Board of Governors of the University of Toronto for a grand total of $3.00.
Today, insulin list prices regularly increase by double digits annually. In mid-November, the Congressional Research Service reported that the list price of one type of insulin had increased nearly 600 percent from 2001-2015, from $35 dollars a vial to $234. Another study from the Schaefer Center at USC found that ‘the average U.S. list price of [four insulin categories] increased by 15% to 17% per year from 2012 to 2016.’”
“As a result, we’ve heard frequent reports of patients rationing insulin, and in some cases dying because they can’t afford the injections they need to survive. These tragic stories aren’t isolated occurrences. And they’re not acceptable for a drug that’s nearly a century old.”
“…limited competition in the insulin market has helped keep prices artificially high. Today, according to the Congressional Research Service, three firms control 90 percent of the global insulin market, and produce all the insulin used in the U.S.”
Pharmacy Benefit Managers (PBMS) didn’t escape his notice, either.
Dr. Gottlieb noted that many profits disappear into the hands of PBMs, but he said the system felt too coordinated for comfort:
“…drug manufacturers use rebates generated by the gap between their rising list and net prices to pay for preferred status on pharmacy benefits managers (PBM) formularies. Monopoly profits benefit every member of the drug supply chain, except the patients who most need access to affordable products. This includes diabetic patients in high deductible health plans who can find themselves paying list prices for these drugs that no one else pays.”
Insulin soon will no longer be categorized as a drug, but instead as a “biologic” in 2020
He hopes this largely regulatory change will help drugmakers more easily bring biosimilar (biological copies) of insulin to market. This is not a newly announced change, and Dr. Gottlieb seemed to warn drugmakers that they’ve had time to prepare for it.
He also said that as insulin switches categories from a drug to a biologic, the FDA will not allow drugmakers to use the switch as an excuse for extending patent protection: “They don’t get to start benefiting from the 12 years of exclusivity that the law grants to newly licensed biologics, just because these drugs – some of which were approved decades ago – are being treated as biologics for the first time.”
He predicts this will bring less expensive biosimilars to market by March 2020.
If all works as planned, he envisions biosimilars being easily substituted for more expensive insulins at pharmacies in the future: “The new pathway we’re laying out today should help usher in a new era of competition for these products that’ll lead to lower prices and better access. Change won’t happen overnight. But we’ve crafted this policy to meet the needs of patients. It’s an opportunity that can’t come soon enough for the thousands of Americans who struggle to pay for insulin.”
It’s an ambitious plan, one sure to be challenged by drugmakers before it is implemented. We will report more on this issue as it develops.
To read the full text of the speech, go here: https://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm628121.htm
The photo above was not taken at the speech mentioned in this story.