The Food and Drug Administration took steps Tuesday to try to curb drug prices by increasing competition in the pharmaceutical market.
The FDA posted a list of branded drugs that are not protected by a patent and are not facing looming generic drug competition in an effort to increase transparency and encourage generic drug development. The agency will fast-track its review of generic drug applications, known as abbreviated new drug applications, a policy move that the FDA called the first of its kind.
Consumers see significant price reductions when there are multiple FDA-approved generics, the agency said.
The news follows the FDA's announcement last week that it is working on a drug competition action plan that aims to get more generic drugs to market sooner by closing regulatory loopholes that branded drugs use to thwart the development of generics, among other initiatives.
"No patient should be priced out of the medicines they need, and as an agency dedicated to promoting public health, we must do our part to help patients get access to the treatments they require," FDA Commissioner Dr. Scott Gottlieb said in a statement. "Getting safe and effective generic products to market in an efficient way, being risk-based in our own work and making sure our rules aren't used to create obstacles to new competition can all help make sure that patients have access to more lower-cost options."
More competition in the pharmaceutical industry has been widely touted as a way to reduce drug prices. Conversely, a lack of competition has been cited as a main driver behind sharp price increases for drugs such as Mylan's EpiPen.
A drastic increase in the price of a small fraction of new patented drugs has accelerated annual growth in national pharmaceutical spending, according to a recent Blue Cross and Blue Shield Association study. The trend affects consumers, providers and payers alike, all of whom have seen the price of patented drugs jump 18% every year since 2010.
"Competition works better than any government-designed program to lower costs for consumers," Joel White, president of the Council for Affordable Health Coverage, said in a statement. "We've seen time and again that more products lead to lower costs, and incentives to pay for products based on their value help improve outcomes."
Part of the problem is that some drugs that are expensive to make lack viable, more-affordable alternatives. These often unavoidable costs have caused some providers to shift strategies.
"Ten percent price increases a year for drugs we use a lot really hit our budget," Dr. Scott Knoer, chief pharmacy officer at the Cleveland Clinic, told Modern Healthcare in May. "Margins are tightening across the board."
At times, the most effective treatment may be delayed or even denied due to coverage disputes over high-cost drugs, he said.
Providers such as the University of Utah Health Care system implemented guidelines to ensure that high-cost drugs are being used appropriately and has had to reduce the inventories of those drugs, said Erin Fox, the system's director of drug information.
Several bills are aimed at lowering drug prices through increasing generic competition, including the FAST Generics Act and Improving Access to Affordable Prescription Act, which strive to restrict anticompetitive practices that branded drugmakers use to delay or deter generic applications. Some drugmakers have used the FDA's Risk Evaluation and Mitigation Strategies program to create closed distribution networks that bar competitors from accessing product samples needed to secure regulators' approval, lawmakers said.
A proposed executive order on drug pricing from the Trump administration was recently leaked. The order aims to curb drug prices in large part by cutting regulations. It has been met with opposition from groups like Doctors Without Borders that argue the flawed order "will perpetuate policies that have led to a broken biomedical research and development system and raise drug prices around the world."
