PDUFA Negotiations: REMS Mud-Slinging, Supply Chain Compromising, GAIN Diminishing?

PhRMA and GPhA exchange unpleasantries over the legislative pay-for; FDA offers a compromise track-and-trace program that would use the industry proposal as a starting point; structure of antibiotic incentives still unresolved.

The generic drug industry has shifted toward a frontal assault on its brand counterpart as both push dueling pay-for provisions in the user fee reauthorization bill.

A pay-for that generic firms worked to get into the Senate version of the user fee bill, which would allow generic manufacturers easier access to brand drugs with a Risk Evaluation and Mitigation Strategy for testing, may be in danger of being deleted from the final legislation in favor of an alternative in the House version.

The Generic Pharmaceutical Association wanted to make clear who it holds responsible for what it views as a back-door undoing of an agreement between stakeholders and legislators.

“REMS were not created to serve the interests of the generic drug or [Pharmaceutical Benefit Manager] sectors.” – Matthew Bennett, PhRMA senior vice president of communications and public affairs

GPhA President and CEO Ralph Neas said the REMS change was negotiated by the Senate after a meeting that included brand and generic representatives.

But later, Neas said, the Pharmaceutical Research and Manufacturers of America decided to oppose the provision when it reached the House. That resulted in the House implementing a different pay-for provision, which would reduce the time FDA had to respond to citizen petitions.

“To do less, to pass this without that [REMS] provision would be unconscionable,” Neas said during a June 14 press conference. “The need for affordable medicines in health care is far too great to be bargained away in a convenient political trade.”

The pay-for provisions are necessary to ensure the bill does not increase the federal deficit.

The REMS change, along with drug tracking standards and antibiotic incentives, remain lobbying focal points as negotiations near their conclusion on Capitol Hill.

GPhA and other stakeholders pushed hard to influence legislators to put the REMS provision in the final bill, arguing that scraping it would allow continued abuse of the REMS system to prevent generic competition (Also see "GPhA Pushes REMS Pay-for, Schedule III Hydrocodone In User Fee Bill" - Pink Sheet, 6 Jun, 2012.).

While existing law already states brand companies cannot deny generic companies access to product for testing, Neas said the law does not have a strong enforcement mechanism. The Senate bill would make denying access to generic companies a REMS violation.

Neas, along with representatives of AARP and Express Scripts Holding Co., said during the press conference that deleting the provision also could endanger the burgeoning biosimilars market.

“If we do not get this under control with respect to biosimilars, we could bankrupt the health care system and the national economy,” he said.

PhRMA declined to answer questions about its position on the pay-for dispute. The group instead issued a general statement explaining the definition of REMS.

“REMS were not created to serve the interests of the generic drug or [Pharmaceutical Benefit Manager] sectors,” Matthew Bennett, senior vice president of communications and public affairs, said in the statement. “When REMS are imposed on companies by the FDA, it is within the context of patient safety, and that should continue to be the focus moving forward.”

FDA also declined to comment on which pay-for it preferred or whether it wanted more authority to police brand companies using REMS to prevent generic testing.

GPhA Also Questions CBO Scores

GPhA also suggested the REMS provision it favors was likely to save more than the Congressional Budget Office estimated and said the estimate of the House bill’s savings was highly speculative.

CBO estimated the Senate provision would reduce health care spending $753 million between fiscal years 2013 and 2022 (Also see "CBO Says Senate User Fee Package Will Decrease Direct Spending" - Pink Sheet, 14 May, 2012.).

Overall, CBO gave a better score to the House bill and its pay-for. It estimated the bill would cut the deficit $114 million between FY 2012 and 2017 and $370 million between FY 2012 and 2022.

CBO said the Senate bill would cut the deficit $71 million between FY 2012 and 2017 and $363 million between FY 2012 and 2022.

CBO estimated the citizen petition provision in the House bill would reduce direct spending by federal health programs $168 million over the FY 2013 to 2022 period, but that came with an initial estimate that the bill would increase federal spending between FY 2012 and 2022.

Adjusting the citizen petition provision to include biologics ended up saving $617 million and pushed the bill to be a net deficit reduction (Also see "FDA User Fee Work Continues Following House Passage" - Pink Sheet, 30 May, 2012.).

GPhA argues that number of petitions that will involve biosimilars is highly speculative, and the entire pathway itself could disappear if the Supreme Court strikes down the health care reform law in its entirety.

The target date for negotiators to complete the user fee bill is June 18, although that deadline may be missed. House and Senate leaders want to pass the final legislation and send it to President Obama by the end of June (Also see "User Fee Conference Cmte. Could Be Relatively Messy After Clean Floor Votes" - Pink Sheet, 4 Jun, 2012.).

FDA Offers Modified RxTEC As Path To Unit-Level Tracking

In another aspect of the bill, FDA may have made the move that allows negotiators to reach an agreement for a drug shipment tracking system.

On June 11, the agency submitted a compromise proposal where it stepped back from its preference that a unit-level tracking system be implemented.

The agency said it could accept the industry-supported RxTEC proposal, which would require only lot-level serialization of shipments, but wanted it to be the foundation for implementation of a stronger system in the future.

The agency proposal would clarify the responsibilities of each supply chain participant so the law would be enforceable. Within six months of enactment, distributors, wholesalers and others in the chain would have to investigate suspect product and remove problematic shipments from the market.

The proposal would not preempt state tracking laws for five years “until an adequate federal system is in place,” according to an FDA summary of the proposal.

The agency also wanted to ensure there was a “clear path to a more robust system” if the unit-level system it wants could not be implemented right away (Also see "Track And Trace System Could Start With RxTEC As Foundation, FDA Says" - Pink Sheet, 14 Jun, 2012.).

FDA decided to build on the user fee bill amendment introduced by Sens. Michael Bennet, D-Colo., and Richard Burr, R-N.C., which was withdrawn during the committee mark-up. RxTEC was included in the user fee bill that passed the full Senate, but was considered only placeholder language (Also see "Track And Trace Negotiations Continue As Senate Works To Cull Amendments" - Pink Sheet, 22 May, 2012.).

Agency officials have made no secret of the fact that they think the RxTEC system is not acceptable because it would not solve existing supply chain problems.

RxTEC would require unique identifiers be attached to shipments that would be verified at each supply chain step. FDA wants a real-time system that can track individual units as it moves through the chain in the hope of preventing cargo theft and adulteration (Also see "Track And Trace: Substandard System Is Not Better Than Nothing, FDA Says" - Pink Sheet, 23 Apr, 2012.).

In backing off the real-time requirement, FDA officials may be able to smooth the path to an agreement on the issue.

Industry is concerned a unit-level system would be cost-prohibitive and wants one national tracking standard imposed so companies are not forced to comply with conflicting state laws, namely the California electronic pedigree statute set to begin its phase-in in 2015 (Also see "Supply Chain Safety’s Dual Visions: Pedigree Or Just Serialization" - Pink Sheet, 2 Mar, 2012.).

A phased-in national approach may work for industry, if enough time is allowed for it to obtain and perfect the necessary technology.

EMD Serono already has implemented unit-level tracking and is finding the model is reasonable (Also see "California Track-and-Trace Law Is Good Model, EMD Serono Says" - Pink Sheet, 7 Jun, 2012.).

Flexibility Of GAIN Concerning

FDA and some stakeholders also continue to worry about the potential outcome of the debate over new incentives for antibiotics.

Efforts are focused on ensuring Congress does not implement a more restrictive definition of the pathogens qualifying for the incentive, which they said could limit the agency’s authority and create an administrative hassle.

Both House and Senate user fee bills have the basic elements of the Generating Antibiotic Incentives Now (GAIN) Act, but the Senate version gives examples of pathogens that should be targeted with antibiotics receiving the incentive.

The House version is more prescriptive with its pathogen list. It allows additions and changes, but through the rulemaking process.

FDA and others oppose the House version because it does not allow the freedom to change as the industry and research evolve (Also see "FDA Antibiotic Legislation Should Focus On Criteria, Not Bacteria, Woodcock Says" - Pink Sheet, 8 Mar, 2012.).

The agency said June 12 the list in the House bill is not the list of qualifying pathogens that would have been compiled two years ago or the list that likely would be constructed two years from now.

“It is precisely because pathogens evolve so quickly that infections become drug-resistant,” FDA said in a written statement. “Efforts to encourage antibiotic drug development should be flexible and not prescriptive, targeting drugs that treat infections, not drugs that treat a specific list of bugs. To do otherwise might actually slow innovation because FDA would first need to develop a pathway for designating specifically listed pathogens.”

Several groups, including the Infectious Diseases Society of America, have pressed Congress to ensure the Senate’s qualifying pathogen language is implemented.

IDSA said the Senate language was better because it “limits the incentives to serious and life-threatening infections, provides a process for selecting and updating qualifying pathogens, and ensures a designation cannot be withdrawn if the list changes.” The group said that provision was its highest priority for the user fee bill.

Stakeholders also argue the Senate language fits better with how antibiotics are developed, which is not based on the pathogens they treat.

When the House Energy and Commerce Committee marked up its version of the bill, there were disagreements over the extent of the incentive. Rep. Henry Waxman, D-Calif., said it was not targeted tightly enough (Also see "PDUFA Scrubbing: How The House User Fee Bill Got So Agreeably Clean" - Pink Sheet, 14 May, 2012.).