On 12 February, the Trump administration released its 2019 US Government budget proposal. The budget includes several proposals designed to address ‘the problem of high drug prices’ including plans that would enable the US Food and Drugs Agency (FDA) to bring new generic drugs to market faster.
The proposal ensures that first-to-file generic applicants ‘do not unreasonably and indefinitely block subsequent generics from entering the market beyond the exclusivity period’. This is intended to prevent the ‘parking’ of exclusivity by first-to-file generic manufacturers.
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Barring some exceptions, generic drug manufacturers that file their abbreviated new drug application first are granted a 180-day period of exclusivity, meaning that the FDA ‘cannot approve subsequently submitted’ applications until that period has expired.
The original aim of the 180-days of exclusivity was to encourage potential generic drug manufacturers to release competitors into the market. Currently, if a drug approval has been filed but has not yet been approved due to deficiencies, the FDA does not approve other generic applications for the same drug until the deficiencies are fixed. This means that companies that file their new drug application first can intentionally delay or block subsequent generic competitors from being granted approval.
Under the new proposal, subsequent applicants will not have to wait for the first-to-file applicant to fix the deficiencies in its application, and manufacturers cannot postpone seeking final approval with the intent to delay competition.
The rationale behind the proposal is that it will spark more competition among generics manufacturers, thus driving down prices. This is the first time President Trump has issued a major proposal to lower drug prices since coming to the White House, despite accusing pharmaceutical companies of ‘getting away with murder’.
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By GlobalDataThe administration projects that this reform will save the government $1.8 billion in Medicare savings over the next 10 years.
Under the proposed budget, the FDA budget will increase by $673 million to $5.8 billion, the largest boost in public funding ever for the agency. However, the budget for the Department of Health and Human Services did not fare so well and will be cut by 21%.
An additional $5 billion will be designated to combatting the opioid epidemic over the next five years, with some of the resources proposed for the FDA used to develop regulatory science tools to help control the abuse of opioids.
