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Manufacturers are under pressure to develop pipelines, promote quality, and justify pricing.
The biopharmaceutical industry faces multiple challenges in 2015. Scrutiny continues to intensify over prices of new drugs and biotech therapies, while demand escalates for more safe and effective treatments for deadly diseases at home and abroad. A central theme is to pay more attention to the needs of patients, who have insight into the personal impacts of new medicines and trade-offs in risks and benefits. Drug development and manufacturing will be shaped by these trends in coming months.
Optimists hope that Republican gains will create a more collaborative environment in Washington and that needed legislation will be enacted before the 2016 presidential elections put new policy initiatives on hold. The debate over the federal budget involves proposals to increase funding for the National Institutes of Health (NIH) and FDA, as well as emergency support for research and treatment for Ebola and other public health problems. But outlays are not likely to increase noticeably. All sides talk about enacting tax reform, including renewal of expiring tax credits important to industry research and investment and concerns about foreign tax benefits. International trade proposals on the table contain key provisions for the pharmaceutical industry, but could become entangled in politics.
Leaders of the House Energy & Commerce Committee are moving forward with legislation promoting 21st Century Cures. Committee chairman Fred Upton (R-Mich) plans to issue a “discussion draft” this month and to move a bill through the E&C Committee in March so the House can vote on it before Memorial Day. That would leave time for the Republican-controlled Senate to approve similar legislation, with an eye to modernizing clinical trials, promoting digital medicine, attracting more young scientists into biomedical research, and providing added incentives for developing new antibiotics and critical therapies.
Looming over these initiatives is the possibility that the Supreme Court will rule against Obamacare subsidies that are key to expanding healthcare coverage to millions. Such a decision could curb demand for prescription drugs and undermine the nation’s healthcare system.
Pricing and costs
Discussion of drug research, development, production, and marketing continue to be dominated by concerns about prescription drug pricing, as seen in the international debate over the value of remarkably effective, but high-priced hepatitis C therapies. The anticipated emergence of more breakthrough treatments for cancer and other life-threatening conditions has insurers and payers anxious about a steady growth in outlays for “specialty” biopharmaceuticals. And rising prices for generic drugs have raised objections.
Health insurers have launched an aggressive campaign to pressure manufacturers to hold the line on prices, while pharmaceutical companies counter with criticism of insurers and pharmacy benefit managers (PBMs) for tightening formularies and boosting coinsurance rates to shift more costs to individuals. Consumer advocates want FDA to be more active in vetting comparative studies that can inform on drug value and continue to pressure the government to seek lower prices on medicines dispensed through Medicare, Medicaid, and other public health programs. There are proposals to boost Medicaid rebates on drugs that raise prices precipitously; to limit drug coverage by Medicare Part D plans to spur price competition; and to further extend low 340b prices to more hospitals and healthcare entities. Manufacturers are watching closely how the Patient Centered Outcomes Research Institute (PCORI) weighs in on comparative effectiveness research and whether PBMs will curb formularies further-and how these developments threaten patient access to treatment.
Pipelines and research productivity
Analysts are optimistic about growth in biopharmaceutical R&D and prospects for market approval of more important new therapies. Outlays on medicines will rise, reports the IMS Institute of Healthcare Informatics, led by growth in specialty drugs and cancer treatments. At the same time, the cost of pharmaceutical R&D continues to soar, according to the latest analysis by Tufts Center for the Study of Drug Development (CSDD), which puts the total cost of developing a new drug at a whopping $2.6 billion. The distressing revelation here is a lack of progress in making biopharmaceutical R&D more efficient, in lowering high failure rates in experimental programs, and in developing methods for reducing the time and complexity of clinical research. CSDD researchers attribute higher pharmaceutical development costs to more complex and larger clinical trials, to increased focus on hard-to-treat chronic and degenerative diseases, and to payer demands for more comparative effectiveness data.
To better finance R&D, pharmaceutical companies, academic research institutions, and government agencies are supporting more collaborative efforts that can tap additional expertise and resources. Non-profit disease groups are linking up with pharmaceutial companies to fund specific drug-development programs, while government agencies are boosting support for R&D on tropical diseases such as Ebola and rare conditions that lack sufficient markets to attract private investment. Broader partnerships continue to explore ways to improve clinical research methods and systems; to develop standards for collecting and submitting data to FDA and other regulatory authorities; to develop biomarkers and measures of drug efficacy; and to tackle a range of precompetitive and regulatory issues that hopefully will bring down research costs in the future.
Shortages of important medicines, many stemming from drug production and packaging problems, continue to roil the healthcare system and to rack up heavy costs for industry. Manufacturers and regulatory authorities seek new strategies to prevent and detect low-quality and adulterated products and to protect pharmaceutical supply chains in the United States and other regions.
Most visible is the major reorganization underway in FDA’s Center for Drug Evaluation and Research, which is establishing a new Office of Pharmaceutical Quality to better coordinate review and inspection of drugs, biotech therapies, generic drugs, and over-the-counter products. FDA also is promulgating new rules for pharmacy compounders and establishing new systems for tracking drugs through the supply chain to prevent the distribution of adulterated and counterfeit medicines. FDA officials hope these initiatives will encourage top management of pharmaceutical companies to recognize the importance of manufacturing systems in providing quality medicines for patients and in avoiding costly legal and public health crises.
Efforts to facilitate access to potentially life-saving therapies have brought patients to the forefront of important regulatory and research discussions involving assessment of potential benefits in the face of increased or uncertain risks. The success of FDA’s breakthrough drug program testifies to strong public support for accelerating clinical development of highly effective therapies, with confirmation of safety and efficacy following market approval. FDA continues to hold frequent consultations with disease groups on patient preferences in assessing treatments for critical diseases, expanding use of patient-reported outcomes, identifying clinical trial participants, developing patient-friendly protocols, and adopting biomarkers and surrogate endpoints.
Patients also seek access to medicines, expressing concerns about high drug prices while also challenging insurers, PBMs, and health programs to provide adequate reimbursement for approved therapies. Patient groups support added incentives for developing drugs for populations with limited commercial markets, including young children, rare conditions, and third-world diseases. Patient-centeredness has become the governing mantra for effective drug development, adding to support for collaborative partnerships, market incentives, and balanced consideration of costs and savings.
Article DetailsPharmaceutical Technology
Vol. 39, Issue 1
Citation: When referring to this article, please cite it as J. Wechsler, "Politics and Patients to Shape Pharma in 2015," Pharmaceutical Technology 39 (1) 2015.