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The House Energy and Commerce Health Subcommittee has announced a series of hearings on FDA user fees for prescription drugs, generic drugs, biosimilar drugs, and medical devices. The hearing schedule is as follows: a February 1, 2012 hearing will address reauthorization of the Prescription Drug User Fee Act; on February 7, a Subcommittee hearing will focus on the new Generic Drug User Fee proposal and Biosimilar User Fee proposal; and on February 15, the Subcommittee will hold a hearing on reauthorization of the Medical Device User Fee Act.

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The House Energy and Commerce Health Subcommittee has announced a series of hearings on FDA user fees for prescription drugs, generic drugs, biosimilar drugs, and medical devices. The hearing schedule is as follows:

• A February 1, 2012 hearing will address reauthorization of the Prescription Drug User Fee Act;
• A February 7 hearing will focus on the new Generic Drug User Fee proposal and Biosimilar User Fee proposal; and
• A February 15 hearing will examine reauthorization of the Medical Device User Fee Act.

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This post was written by Erin Janssen.

On December 19, 2011, the FDA is hosting a public meeting to discuss proposed recommendations for enactment of a Generic Drug User Fee Act (GDUFA), which would authorize FDA to collect fees and use them for the process for the review of human generic drug applications and associated Type II Active Pharmaceutical Ingredient Drug Master Files and for conducting associated inspections for fiscal years (FYs) 2013–2017. The FDA notes that new legislation would be required for FDA to establish and collect user fees under such a program. Registration for the meeting closes December 12; the meeting also will be webcast. The FDA also is accepting written is comments on the recommendations until January 6, 2012.

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This post was written by Debra A. McCurdy and Susan A. Edwards.

On September 19, 2011, President Obama presented his deficit reduction plan – including $320 billion in proposed federal health spending cuts – to the Joint Select Committee on Deficit Reduction, which was created by the Budget Control Act of 2011 to craft a legislative package to cut the federal deficit by at least $1.5 trillion. If legislation is not adopted to achieve deficit reduction targets by January 2012, $1.2 trillion in across-the-board spending cuts (sequestration) would be triggered, effective January 2013.

The health care industry has a significant stake in the outcome of the Joint Select Committee’s work, since Medicare spending in particular is expected to figure prominently in the Committee’s package. Under President Obama’s plan (which the Joint Select Committee is not obligated to follow), Medicare spending would be cut by about $248 billion over 10 years, with more than half of the savings coming from new Medicare drug rebates. Medicaid and other health funding also would be reduced by about $72 billion. If sequestration ultimately is triggered, on the other hand, Medicare provider payments also would be subject to reduction; but the Congressional Budget Office (CBO) recently estimated that the level of Medicare cuts under sequestration would be approximately $123 billion between 2013 and 2021.

This Alert provides an overview of the Budget Control Act, including the two possible mechanisms for lowering the federal deficit: (1) enactment of the Joint Select Committee’s proposal; and (2) sequestration. In addition, this Alert discusses recent developments, including President Obama’s deficit reduction plan, and provides a timeline for action under the Budget Control Act.

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On July 21, 2011, the Senate Judiciary Committee approved S. 27, the Preserve Access to Affordable Generics Act, which would prohibit certain so-called “pay-for-delay” agreements in patent litigation settlements in which a brand-name pharmaceutical company compensates a generic pharmaceutical company for delays in generic entry. On July 28, 2011, the House Energy and Commerce Committee approved H.R. 2405, the Pandemic and All-Hazards Preparedness Reauthorization Act (which reauthorizes certain provisions of the Project Bioshield Act of 2004 and Pandemic and All-Hazards Preparedness Act of 2006); H.R. 1254, the Synthetic Drug Control Act (which would make illegal synthetic drugs that imitate the effect of drugs like marijuana, cocaine, and methamphetamines); and H.R. 1852, the Children's Hospital GME Support Reauthorization Act (which provides support to children’s hospitals for pediatric medical residency programs). On August 3, the Senate Health, Education, Labor and Pensions Committee Committee is scheduled to vote on S. 958, the Children's Hospital GME Support Reauthorization Act, and S.1094, the Combating Autism Reauthorization Act.

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A number of Congressional panels have held hearings on health policy issues this month, and more are scheduled, including the following:

• The House Energy and Commerce Committee has held hearings on: reauthorization of the Prescription Drug User Fee Act (PDUFA); the ACA’s Independent Payment Advisory Board (IPAB), which is charged with helping to contain Medicare costs; and legislation addressing children's hospital graduate medical education (GME) costs (H.R. 1852) and autism research (H.R. 2005). On July 20, the panel will hold a hearing on “FDA Medical Device Regulation: Impact on American Patients, Innovation and Jobs." On July 21, the Committee will hold a legislative hearing to review H.R. 1254, the Synthetic Drug Control Act, H.R. 2405, a bill to reauthorize certain provisions of the Public Health Services Act and the Federal Food, Drug, and Cosmetic Act relating to public health preparedness and countermeasure development; and draft legislation entitled the Enhancing Disease Coordination Activities Act.  
• The House Budget Committee held hearings on the IPAB and the sustainability of the Medicare program.
• The House Oversight and Government Reform Committee held a hearing on "Fulfilling A Legal Duty: Triggering A Medicare Plan From The Administration." 
• The Senate Finance Committee held a hearing on “Governors’ Perspectives on Medicaid.” 
• The Senate Homeland Security and Governmental Affairs Committee held a hearing entitled "Harnessing Technology and Innovation to Cut Waste and Curb Fraud in Federal Health Programs." 
• On July 21, the Senate Special Committee on Aging will hold a hearing on reducing Medicare drug costs.
• On July 21, the Senate Judiciary Committee is scheduled to vote on S. 27, the Preserve Access to Affordable Generics Act.
• On August 3, 2011, the Senate Health, Education, Labor and Pensions Committee is scheduled to vote on S. 958, the Children's Hospital GME Support Reauthorization Act, and S.1094, the Combating Autism Reauthorization Act. 

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The HHS Office of Inspector General (OIG) has issued a report entitled “Medicare Payments for Newly Available Generic Drugs.” The report notes that because of the timing of manufacturer reporting of quarterly average sales price (ASP) data to CMS and when those data are used to calculate payment amounts, there is a two-quarter lag between when sales occur and when Medicare payment amounts reflect those sales.  This lag can have a significant impact when newly-available generic drugs enter the market, since their ASPs can be substantially lower than their brand counterparts but Medicare payment can remain at the higher brand level for two quarters or more. According to the OIG, Medicare could have saved an estimated $111 million if “payment amounts reflected actual sales prices during the initial generic availability of 16 drugs,” representing 25% of total expenditures for these drugs during the period. The OIG recommends that CMS: (1) work with Congress to require manufacturers of first generics to submit monthly ASP data during the period of initial generic availability, and (2) if effective in alleviating the financial impact of the two-quarter lag, consider requiring monthly ASP submissions for all Part B-covered drugs. CMS did not concur with the OIG, noting increased administrative burdens associated with monthly ASP reporting requirement and the potential that it actually would result in price increases.

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This post was written by Paul Sheives.

FDA has extended its comment period its August 9, 2010 generic drug user fee program notice from October 17, 2010 to December 6, 2010.  FDA also has extended a comment period on reauthorization of the Prescription Drug User Fee Act (PDUFA) until October 21, 2011.

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This post was written by Paul Sheives and Areta Kupchyk.

FDA will hold a public meeting on September 17, 2010 to seek input on the development of a generic drug user fee program. Currently, FDA does not have the statutory authority to collect user fees for generic drugs. Specifically, FDA seeks comments on: (1) how the generic user fee program should differ from current user fee programs; (2) the structure of the generic user fee program; (3) performance goals for FDA; (4) whether all products should pay the same fee, or differ based on complexity of the application; (5) how to address applications currently pending review; and (6) support for post-marketing safety by generic user fees. Registration for the meeting closes September 9, 2010, but early registration is recommended. Written comments are being accepted until October 17, 2010. 
 

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On July 22, 2010, the Senate voted to reject House amendments to an emergency supplemental appropriations bill (H.R. 4899) that would block certain agreements in patent litigation settlements that delay generic drug market entry, and modify the definition of average manufacturer price (AMP).

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On July 1, 2010, the House of Representatives approved an amendment to a supplemental appropriations bill (H.R. 4899) that includes two provisions impacting prescription drugs. First, the House amendment includes a provision to block certain so-called “pay-for-delay” agreements in patent litigation settlements in which a brand-name pharmaceutical company compensates a generic pharmaceutical company for delays in generic entry. Second, the amendment would clarify the definition of average manufacturer price (AMP) – and thus the application of the Medicaid drug rebate statute -- for inhalation, infusion, and injectable drugs that are not dispensed through a retail community pharmacy. Note that the Senate still must approve the amendment before it can be enacted into law.

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The Centers for Medicare & Medicaid Services (CMS) has released a memo to Part D Plan Sponsors on "Additional Guidance on 2011 Coverage for Generic Drugs in the Coverage Gap." The memo responds to questions CMS has received about 2011 bid submissions and the new provision regarding coverage for generic drugs in the coverage gap included in the Affordable Care Act.

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The Federal Trade Commission has released a “staff study” entitled “Pay for Delay: How Drug Company Pay-Offs Cost Consumers Billions.” The report examines agreements in patent litigation settlements in which a brand-name pharmaceutical company compensates a generic pharmaceutical company for delays in generic entry. According to the study, over the past six years, such agreements delayed generic entry by an average of 48 months. Over the next 10 years, the study concluded that pay-for-delay agreements will cost American consumers an estimated $35 billion ($3.5 billion per year). While the FTC intends to continue litigating pay-for-delay cases under antitrust laws, the report contends that “a legislative solution offers the quickest and clearest way to deter these agreements and obtain the benefits of generic competition for consumers.”

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