Hot Topic Roundup
Supreme Court upholds Obamacare
Pharmaceutical and biotech manufacturers can expect FDA to develop a pathway for testing and approving biosimilars as the
Obama administration implements the multiple provisions of the Affordable Care Act following the landmark Supreme Court ruling.
Industry also will continue paying higher Medicaid drug rebates and hefty excise taxes to the Treasury, along with discounts
on drugs prescribed to Medicare patients in the "coverage gap." See Guest Editorial.
No overtime for sales reps
Another important Supreme Court decision for pharmaceutical companies rejected demands from sales representatives for overtime
pay. A narrow conservative majority ruled that the detailers employed by GlaxoSmithKline are not protected by the Fair Labor
Standards Act (FLSA) because they are "outside salesmen" that do not actually sell products, but provide information to physicians
designed to stimulate prescribing. The ruling is regarded as a rebuke to the Department of Labor and the Obama administration,
and it is expected to halt the wave of lawsuits filed against manufacturers over recent years. But the decision may be good
for sales representatives, according to some analysts, because pharmaceutical companies otherwise might lay off even more
detailers than they already have.
FDA promotes supply-chain pilot
Just as Congress approved FDA user-fee legislation without any provision for establishing a national drug track-and-trace
system, the agency indicated it was moving forward with a long-planned pilot to test ways to ensure the quality and integrity
of imported pharmaceutical ingredients and finished products. The Secure Supply Chain Pilot Program was originally proposed
in 2009 but generated concerns about excessive red tape and oversight. Now FDA has revised the program and is seeking final
approval from the Office of Management and Budget to move forward. FDA's plan is to select up to 100 manufacturers and importers
that each submit information on how five drugs will be imported into the US. Applicants must maintain records documenting
the product's movement through their secure supply chain, meet customs requirements to guard against terrorism, and demonstrate
that they comply with good importer practices proposed by FDA.
A fairly obscure provision in the FDA Safety and Innovation Act seeks to clarify how FDA may—or may not—regulate medical applications
for smart phones and other computer devices, a hot issue with manufacturers and health authorities. The final bill stops short
of prohibiting FDA from finalizing a draft guidance document issued last year that proposed agency regulation of software
that links to a device, but not low-risk applications such as calorie counters. Consequently, FDA officials are expected to
hold off on drafting a final guidance until it forms a working group, as required by FDASIA, to quickly (in 18 months) develop
a strategy for an "appropriate, risk-based regulatory framework" on health IT "that promotes innovation, protects patient
safety and avoids regulatory duplication." FDA will consult with the National Coordinator for Health Information Technology
and the Federal Communications Commission and include manufacturers, payers, venture capitalists, IT vendors, patients, providers,
and others in the working group.
The compromise measure reflects concerns of software and medical device companies that FDA will over-regulate this budding
industry, squashing innovation and promising health technology. There already are some 40,000 medical apps, some developed
by pharmaceutical manufacturers looking to enhance patient use of treatments for diabetes and other medical conditions and
to help manage clinical trials. FDA regulates medical software that controls x-ray machines, infusion pumps, and certain implants
and recently approved a medical app that displays radiological images. Some software developers support FDA regulation to
gain more predictability in market requirements, despite the cost and time of compliance.
Biomedical innovation in trouble?
The time and cost of developing new drugs are rising, venture capitalists make no return on investments in biopharma R&D,
and other countries are boosting support in this area while US policymakers propose funding cuts for the National Institutes
of Health (NIH). Experts painted this bleak picture of the "state of biomedical innovation" at a June seminar sponsored by
the Brookings Institution. There is a "relentless decline" in biopharma R&D productivity, as measured by the number of new
drugs approved compared with spending on R&D, pointed out Jonathan Leff of Warburg Pincus. NIH Director Francis Collins warned
that the US faces a decline in its scientific leadership and competitiveness as visionary scientists find research funding
increasingly difficult to obtain. FDA Commissioner Margaret Hamburg cited the impact that reimbursement and immigration policy
have on innovation, and that FDA strives to serve as a gateway, and not a barrier, to advancing new product development.
Amgen Chairman Kevin Shearer sounded a more optimistic tone, noting that the US biotech industry continues to "dominate the
world," and that no other country "is even close" to the US in providing the financial support and scientific infrastructure
for biopharmaceutical innovation. If you develop an innovative medicine in America "you'll be rewarded," he noted. The main
strategy for the research community, said Shearer, is to continue investing in NIH, which he termed "a national treasure,"
and to "leave FDA officials alone."
Recently issued guidance document
• Toll-Free Number Labeling and Related Requirements for Over-the-Counter and Prescription Drugs Marketed with Approved Applications