Life Science Compliance Update

June 17, 2016

PhRMA Members Invested $58.8 Billion in R&D in 2015

In 2015, PhRMA member companies invested $58.8 billion in research and development, up 10.3% from 2014. The new R&D data is based on findings from the 2016 PhRMA annual member survey released in the 2016 Biopharmaceutical Research Industry Profile and the corresponding industry chart pack, Biopharmaceuticals in Perspective, which highlighted the wide-reaching impact of PhRMA member companies on the economy and biopharmaceutical innovation.

In the United States, the biopharmaceutical industry is a driver of economic growth and global competitiveness, and is the most research-intensive sector of the economy. The biopharmaceutical industry invests an average of six times more in R&D as a percentage of sales than all other manufacturing industries. The sector also accounted for approximately 17% of all business R&D spending by U.S. businesses. Overall, PhRMA member companies represented the majority of all biopharmaceutical R&D spending in the United States.

According to Stephen J. Ubl, president and CEO of PhRMA,

Investing more than half a trillion dollars in R&D since 2000, our member companies remain tireless in their commitment to driving innovation and delivering greater value than ever before. It is through this increased R&D that the U.S. biopharmaceutical industry continues to lead the world in the development of new medicines to address unmet medical needs of patients.

The increase in long-term R&D investments made by the biopharmaceutical industry have led to more medicines in clinical development than ever before, more than 7,000 medicines globally. As a sign of how increased R&D can really help, from 2000 to 2015, more than 550 new medicines were approved by the United States Food and Drug Administration (FDA) – including 56 new medicines in 2015 alone. Since only 12% of medicines in clinical trials make it to patients, it is critical that there are pro-innovation policies in place that can help sustain the long-term investments needed to develop tomorrow's cures.

As noted in the recently-released "Medicines in Development for Rare Diseases," the biopharmaceutical industry is currently developing more than 560 medicines for patient with rare diseases. The industry is also working to find cures and other treatments for Alzheimer's, cancer and heart disease, and other devastating conditions. This progress once again makes clear that public policies are needed that maintain a health care system that recognizes the value of medicines and incentivizes researchers to continue to develop new treatments and cures for patients.

Of those 560 medicines currently in development for rare diseases, 151 are for rare cancers and 82 are for rare blood cancers; 1468 are for generic disorders, including cystic fibrosis and spinal muscular atrophy; 38 for neurological disorders, including ALS and seizures; 31 for infectious diseases, including rare bacterial infections and hepatitis; and 25 for autoimmune diseases, including systemic sclerosis and juvenile arthritis.

ALS (also known as Lou Gehrig's disease), is notorious for being a rare disease with no cure. However, new therapies that are currently under development, such as antisense technology against SOD1, are a step toward helping patients and their families manage the disease.

These figures and anecdotes show that the biopharmaceutical industry is delivering true value to Americans by transforming patient's lives, lowering projected health care costs, strengthening the United States economy, and helping to improve the drug review and approval process, all while continuing to invest for the long term health of our country.

January 26, 2016

CMS Final Rule on Covered Outpatient Drugs

The Centers for Medicare & Medicaid Services (CMS) issued the Covered Outpatient Drugs final rule with comment on January 21, 2016. The rule addresses important areas of Medicaid drug reimbursement, as well as some of the changes that were made to the Medicaid Drug Rebate Program by the Affordable Care Act. This final rule also requests comments on the definition of line extension, and that comment period expires on April 1, 2016.

This rule attempts to assist states and the federal government in managing drug costs and establishing a long-term framework for implementing the Medicaid drug rebate program.

Managing Drug Costs

While the Affordable Care Act increased the Medicaid rebates that are paid to the federal and state governments, this final rule went a step further in an attempt to ensure that the federal and state governments will save money in managing Medicare costs over the long term. One of those steps the final rule took was to create a regulatory definition for Average Manufacturer Price (AMP). The AMP is a key metric in the Medicaid drug rebate program, determining manufacturer rebates and pharmacy reimbursement for certain generic drugs that are subject to the Federal Upper Limit (FUL).

The new definition of AMP for inhalation, infusion, instilled, implanted, or injectable drugs (5i drugs) will permit states to collect additional rebates on more expensive infused and injected drugs. Some of these 5i drugs are a constantly increasing expense to the Medicaid program and are not commonly dispensed through a retail community pharmacy.

The final rule also creates an incentive for pharmacies to utilize generic drugs by updating the FUL formula for the payment of certain generic drugs. The rule also implements the Affordable Care Act provision that extended rebates to covered outpatient drugs provided to beneficiaries that are enrolled in Medicaid managed care organizations.

Lastly, the final rule expanded the definition of "states" to include United States territories so that territories like Puerto Rico and Guam can receive savings in their drug expenditures.

Sustain Medicaid Drug Rebate Program

The final rule attempts to clarify many of the changes that were made to the Medicaid Drug Rebate Program under the Affordable Care Act and provides pharmaceutical manufacturers with clear regulatory guidance to help calculate and report drug product and pricing information.

In addition to clarifying the definition of what is considered a manufacturer's "best price" and aligning that definition with the definition of AMP, the final rule clarifies the definitions of Retail Community Pharmacy and Wholesaler in determining AMP.

Pharmacy Reimbursement System

The final rule also attempts to align pharmacy reimbursement with the acquisition cost of drugs and work to ensure that the states pay an "appropriate" professional dispensing fee.

The final rule also creates an exception to the FUL calculation, allowing for the use of a higher multiplier than 175% for certain multiple source drugs, and establishes actual acquisition cost (AAC) as the basis by which states determine their ingredient cost reimbursement. One of the impetuses behind AAC being the ingredient cost reimbursement basis is so that payments are "based on a more accurate estimate of the prices available in the marketplace."

In addition, a professional dispensing fee will be initiated so that the dispensing fee paid to pharmacies reflects the cost of the pharmacist's professional services and cost to dispense the pharmaceutical product to a Medicaid beneficiary.

Comments Sought After

While most portions of the rule are considered final, as previously mentioned, CMS is still considering comments received on the definition of line extension. For the time being, manufacturers should rely on the statutory definition of line extension found at 1927(c)(2)(C) of the Act, and are permitted to use reasonable assumptions in determining whether their drugs qualify as a line extension drug.

While the definition of line extension is not yet solidified in the final rule, CMS did finalize two aspects of the line extension provision: specifying the rebate calculation requirements and requiring the alternative rebate be calculated if there is a corporate relationship between the manufacturer of the line extension drug and the manufacturer of the initial brand name listed drug.

 

January 13, 2016

A Year in Review: FDA 2015 New Drug Approvals

The approval of first-of-a-kind drugs rose last year to forty-one, resulting in the highest level of newly approved U.S. drugs in nineteen years. The total number of new drugs approved last year was even higher at sixty-nine. The rising figures reflect an industry-wide desire to research and develop drugs for rare and hard-to-treat diseases.

The newly approved drugs serve to advance medical care and the health of patients suffering from many ailments, including various forms of cancer, heart failure, and cystic fibrosis. Additionally, more than 40% of the new therapies were approved for treatment of rare or "orphan" diseases that affect less than 200,000 Americans. Those suffering from orphan diseases often have few or no drug treatment options; these approvals will provide great help to their treatment regimen.

This trend of increasing numbers of new drugs is beneficial for both industry and patients. Between 2007 and 2011, only one in nineteen drugs that entered early-stage testing made it to market, compared to one in thirteen drugs today. While more drugs may be making it to market, the development time for drugs is increasing, likely due to the complexity of drug trials and demands for more data from health insurers. However, for 2015 new drug approvals, 60% were designated in one or more categories of Fast Track, Breakthrough, Priority Review, or Accelerated Approval. A therapy with one of those designations is helped along the process at a more rapid pace.

Below is a chart of all sixty-nine drugs that were approved in 2015, and their indication. Novel new drugs' brand names are bolded.

Generic Name

Brand Name

Manufacturer

Indication

Approval Date

Ivabradine

Corlanor

Amgen

Heart Failure

April 2015

Sacubitril and Valsartan

Entresto

Novartis

Heart Failure

July 2015

Sebelipase Alfa

Kanuma

Alexion

Lysosomal Acid Lipase (LAL) deficiency

December 2015

Cangrelor

Kengreal

The Medicines Company

Reducing periprocedural thrombotics events

June 2015

Alirocumab

Praluent

Sanofi Aventis

Heterozygous familial hypercholesterolemia or atherosclerotic cardiovascular disease

July 2015

Perindopril Arginine and Amlodipine Besylate

Prestalia

Symplmed Pharmaceuticals

Hypertension

January 2015

Evolocumab

Repatha

Amgen

High Cholesterol

August 2015

Edoxaban

Savaysa

Daiichi Sankyo

Deep Vein Thrombosis, pulmonary embolism and risk of stroke and embolism due to atrial fibrillation

January 2015

Selexipag

Uptravi

Actelion Pharmaceuticals

Pulmonary arterial hypertension

December 2015

Secukinumab

Cosentyx

Novartis

Plaque psoriasis

January 2015

Cobimetinib

Cotellic

Genentech

BRAF V600E or V600K melanoma

November 2015

Calcipotriene and betamethasone dipropionate

Enstilar

LEO Pharmaceuticals

Psoriasis

October 2015

Talimogene laherparepvec

Imlygic

Amgen

Unresectable recurrent melanoma

October 2015

Deoxycholic acid

Kybella

Kythera Biopharma

Submental fat

April 2015

Sonidegib

Odomzo

Novartis

Locally advanced basal cell carcinoma

July 2015

Flibanserin

Addyi

Sprout Pharmaceuticals

Premenopausal women with generalized hypoactive sexual desire disorder

August 2015

Parathyroid Hormone

Natpara

NPS Pharmaceuticals

Control hypocalcemia in patients with hypoparathyroidism

January 2015

Empagliflozin and Metformin Hydrochloride

Synjardy

Boehringer Ingelheim

Type II diabetes

August 2015

Insulin degludec injection

Tresiba

Novo Nordisk

Glycemic control in adults with diabetes mellitus

September 2015

Isavuconazonium Sulfate

Cresemba

Astellas

Invasive aspergillosis and invasive mucormycosis

March 2015

Ciprofloxacin Otic Suspension

Otiprio

Otonomy

Pediatrics with bilateral otitis media with effusion undergoing tympanostomy tube placement

December 2015

Eluxadoline

Viberzi

Actavis

Irritable bowel syndrome with diarrhea

May 2015

Rifaximin

Xifaxan

Salix Pharmaceuticals

Irritable bowel syndrome with diarrhea

May 2015

Ceftazidime-avibactam

Avycaz

Actavis

Complicated intra-abdominal and urinary tract infections

February 2015

Cholic acid

Cholbam

Asklepion Pharmaceuticals

Bile acid synthesis and peroxisomal disorders

March 2015

Trifluridine and Tipiracil

Lonsurf

Taiho Oncology

Metastatic colorectal cancer

September 2015

Irinotecan liposome injection

Onivyde

Merrimack

Metastatic pancreatic cancer following gemcitabine-based therapy

October 2015

Rolapitant

Varubi

Tesaro

Delayed nausea and vomiting associated with chemotherapy

September 2015

Asfotase alfa

Strensiq

Alexion

Hypophosphatasia

October 2015

Uridine Triacetate

Xuriden

Wellstat Therapeutics

Heriditary orotic aciduria

September 2015

Daratumumad

Darzalex

Janssen Biotech

Multiple myeloma

November 2015

Panobinostat

Farydak

Novartis

Multiple myeloma

February 2015

Recombinant Factor VIII

Nuwiq

Octapharma

Prophylaxis and treatment of hemophilia A

September 2015

Idarucizumab

Praxbind

Boehringer Ingelheim

Reversal of anticoagulant effcts of dabigatran

October 2015

Patiromer

Veltassa

Relypsa

Hyperkalemia

October 2015

Daclatasvir

Daklinza

Bristol-Myers Squibb

Chronic HCV genotype 3

July 2015

Ombitasvir, Paritaprevir, and Ritonavir

Technivie

Abbvie

Chronic HCV genotype 4

July 2015

Tacrolimus extended-release

Envarsus XR

Veloxis

Prophylaxis of organ rejection in kidney transplant patients

July 2015

Atazanavir and Cobicistat

Evotaz

Bristol-Myers Squibb

HIV-1 infection

January 2015

Elvitegravir, Cobicistat, Emtricitabine, and Tenofovir Alafenamide

Genvoya

Gilead Sciences

HIV-1 infection

November 2015

Darunavir and Cobicistat

Prezcobix

Janssen

HIV-1 infection

Janaury 2015

Meningococcal Group B Vaccine

Bexsero

Novartis

Invasive meningococcal disease caused by serogroup B

January 2015

Trivalent influenza vaccine

Fluad

Sequirus

Prevention of influenza A and B

November 2015

Meloxicam

Vivlodex

Iroko Pharmaceuticals

Osteoarthritis pain

October 2015

Lesinurad

Zurampic

AstraZeneca

Hyperuricemia associated with gout

December 2015

Aripiprazole lauroxil

Aristada

Alkermes

Schizophrenia

October 2015

Buprenorphine

Belbuca

Endo Pharmaceuticals

Severe pain

October 2015

Carbidopa and Levodopa

Duopa

Abbvie

Motor fluctuations in patients with advanced Parkinson's disease

January 2015

Carbidopa and Levodopa

Rytary

Impax Labs

Parkinson's disease

January 2015

Cariprazine

Vraylar

Allergan

Schizophrenia and bipolar disorder

September 2015

Palbociclib

Ibrance

Pfizer

ER-positive, HER2-negative breast cancer

February 2015

Alectinib

Alecensa

Roche

ALK-positive, metastatic non-small cell lung cancer

December 2015

Elotuzumab

Empliciti

Bristol-Myers Squibb

Multiple myeloma

November 2015

Talimogene laherparepvec

Imlygic

Amgen

Unresectable recurrent melanoma

October 2015

Lenvatinib

Lenvima

Eisai

Thyroid cancer

February 2015

Ixazomib

Ninlaro

Millennium Pharmaceuticals

Multiple myeloma

November 2015

Nivolumab

Opdivo

Bristol-Myers Squibb

Metastatic squamous non-small cell lung cancer

March 2015

Necitumumab

Portrazza

Eli Lilly

Metastatic squamous non-small cell lung cancer

November 2015

Osimertinib

Tagrisso

AstraZeneca

EGFR T790M mutation positive non-small cell lung cancer

November 2015

Dinutuximab

Unituxin

United Therapeutics

Pediatrics with high-risk neuroblastoma

March 2015

Trabectedin

Yondelis

Janssen

Liposarcoma or leiomyosarcoma

October 2015

Lumacaftor and Ivacaftor

Orkambi

Vertex Pharmaceuticals

Cystic fibrosis

July 2015

Sugammadex

Bridion

Merck

Reversal of neuromuscular blockade induced by rocuronium and vecuronium in adults undergoing surgery

December 2015

Uridine Triacetate

Vistogard

BTG

Emergency treatment of patients with a fluorouracil or capecitabine overdose

December 2015

Brexpiprazole

Rexulti

Otsuka

Depression and schizophrenia

July 2015

Mepolizumab

Nucala

GSK

Severe asthma with an eosinophilic phenotype

November 2015

Tiotropium bromide and oldaterol

Stiolto Respimar

Boehringer Ingelheim

Chronic obstructive pulmonary disease

May 2015

Indacaterol and glycopyrrolate

Utibron Neohaler

Novartis

Airflow obstruction in patients with COPD

October 2015

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