Three issues that will define 2011
Years 2009 and 2010 were up and down for the generic drug industry and its main trade group, the Generic Pharmaceutical Association. On one hand, there were the departures of president and CEO Kathleen Jaeger and member company Teva Pharmaceutical Industries. On the other, a regulatory approval pathway for follow-on biologics was created — though it granted longer market exclusivity periods to biotech drugs than the GPhA desired — and there were increases in the use of generics, which accounted for 77% of dispensed prescriptions in the first half of 2010, according to IMS Health.
But 2009 and 2010 are behind the industry, literally and figuratively. In interviews with Drug Store News, GPhA VP regulatory science Gordon Johnston and IMS Health VP industry relations Doug Long spoke about three issues that will be important for the industry in 2011 — probably in a good way.
1. Drug safety : Drug approval in the United States is no easy task because of the strength of the Food and Drug Administration’s regulatory system. But the system still has weak points — particularly the inspection of foreign manufacturing plants. According to a September 2010 Government Accountability Office report, while the FDA inspected more than 1,000 domestic manufacturing plants in fiscal 2009, it inspected 424 in other countries, around 11% of the total.
That could change soon. “Whether supply chain safety comes in the form of legislation or FDA regulations, we … expect to see something coming down the pike in 2011,” Johnston said. Long, however, told Drug Store News he didn’t expect to see “anything major” this year.
2. Generic user fees : A perennial problem facing the generic drug industry is the backlog of applications at the FDA’s Office of Generic Drugs — and it keeps getting bigger. According to the GPhA, the number of applications submitted to the office increased from 361 in 2002, to 830 in 2008, creating a backlog of almost 2,000 applications in 2010, according to a presentation by office director Gary Buehler at the GPhA’s 2010 annual meeting. While federal regulations allow six months’ review time for an application, in practice it often takes 21 months.
Johnston said he expected a user fee program to be implemented by 2013. “I expect that a user fee program will be designed and recommended this year, with [the] industry and FDA working together,” he said.
Long agreed. “There is a very good possibility that user fees will be passed by Congress in 2011,” he said.
3. Patent settlements : When a generics company wants to market its version of a drug ahead of the branded version’s patent expiration, it will file an application with a paragraph-IV certification, asserting the patent is invalid, unenforceable or won’t be infringed, thus usually prompting a lawsuit from the branded drug’s manufacturer. In most cases, the two companies will settle, allowing the generics company to market its drug ahead of patent expiration in exchange for not immediately launching. Delaying launch after a patent has expired would be illegal.
The Federal Trade Commission has assailed the settlements as “pay-for-delay” deals and has sought to ban them, asserting they cost taxpayers $3.5 billion per year. The FTC may find its efforts frustrated with the Republican majority in the House, but it could use other means as well. Johnston said the outcome in Congress was difficult to determine. “Regardless of what happens on the legislative front, this issue may go to the Supreme Court to decide,” Long said.
CVS study: Adherence shrinks health costs
Pharmacy and health policy advocates endlessly tout the cost-saving benefits of improved medication adherence. In January, CVS Caremark put more teeth into that argument with some dramatic new findings that should get the attention of every health plan payer.
Patients with chronic conditions who properly adhere to their drug regimens will save the healthcare system as much as $7,800 a year, CVS researchers concluded after an exhaustive analysis of prescription and medical records. That’s the savings resulting from fewer hospitalizations and emergency room visits for adherent patients with congestive heart failure, according to the study.
Patients with other chronic diseases, such as hypertension and diabetes, also could generate eye-opening savings just by adhering to their prescription therapy, the study found — nearly $4,000 per patient in reduced emergency room visits and acute care incidents.
“Although adherent patients spend more on medications — as much as $1,000 more annually — across the board, they spend significantly less for their overall healthcare costs,” said Troyen Brennan, EVP and chief medical officer of CVS Caremark and a study author.
Company researchers based the study, “Medication adherence leads to lower healthcare use and costs despite increased drug spending,” on a three-year analysis of pharmacy and medical claims data for 135,000 patients with congestive heart failure, diabetes, hypertension and dyslipidemia to determine the direct effect of adherence on costs.
“Particularly important from a policy perspective is the impact of medication adherence on total healthcare spending,” the authors reported in the journal Health Affairs. “Across the board, adherent patients spent significantly less.”
The improved adherence rates generated annual per-person savings of $7,823 for congestive heart failure, $3,908 for hypertension, $3,756 for diabetes and $1,258 for dyslipidemia, researchers found.
Savings were even more pronounced for Americans ages 65 years and older. “Annual total per-person healthcare savings in the older group were $7,893 for congestive heart failure, $5,824 for hypertension, $5,170 for diabetes and $1,847 for dyslipidemia,” the report noted.
One big factor contributing to those lower costs was a reduced need among drug-compliant patients for the hospital. “Across all conditions, adherence was associated with significantly lower annual inpatient hospital days, ranging from 1.18 fewer days for dyslipidemia to 5.72 fewer days for congestive heart failure,” the authors reported.
For a nation battered by ever-rising health costs, a Medicare and Medicaid health safety net frayed by an unsustainable and out-of- control cost structure, and a population increasingly alarmed about the exploding national debt, the ramifications of CVS’ study can’t be overlooked. “Almost half of all Americans, approximately 133 million people, live with at least one chronic disease,” the report noted. “Because ongoing use of prescription medication is a key component of treatment for chronic conditions, medication adherence — or making sure that patients take the drugs prescribed for them — is a matter of great importance to policy-makers, insurance plan sponsors, physicians and patients.”
NACDS gears up for 2011 Regional Chain Conference
ALEXANDRIA, Va. — The National Association of Chain Drug Stores will host in February its annual Regional Chain Conference, designed to bring together retail pharmacy chain executives with product manufacturers and suppliers.
This year’s conference will be held Feb. 6 to 8 at the Ritz-Carlton Naples in Naples, Fla.
The conference programming will include remarks from various executives, including NACDS president and CEO Steve Anderson, and NACDS chairman and CVS Caremark president Larry Merlo, among others.
Click here for more information on attending the conference.