News Capsules

CBO Says Biogenerics Could Save Billions

Efforts to enact legislation that would provide an expedited pathway for the approval of biosimilar therapeutics have been buoyed by estimates released by the Congressional Budget Office (CBO). The agency estimates that a bill reported out of the Senate Committee on Health, Education, Labor, and Pensions (S 1695) would save Americans $25 billion on prescription drug costs over the next 10 years.

The "Biologics Price Competition and Innovation Act" would establish an abbreviated regulatory procedure for FDA licensing of biologic drugs that meet certain requirements and are highly similar to or interchangeable with products originally licensed to innovator companies under the Public Health Service Act.

In related news from Capitol Hill, the Joint Economic Committee also has held a hearing on the issue of prescription drug costs. Committee Chair Charles Schumer (D, NY) has been working with the sponsors of S 1695 toward passage of follow-on biologics legislation and predicts that "the next administration will work with Congress to make sure the FDA implements this priority."

"Countless patients in need of lifesaving biopharmaceutical treatments are struggling to afford their high costs," noted Kathleen Jaeger, president and chief executive officer of the Generic Pharmaceutical Association. "For patients facing serious conditions..., safe and affordable biogenerics would allow them to improve their lives while reducing their health care costs."

Visit cbo.gov/ftpdocs/94xx/doc 9496/s1695.pdf for the full CBO report.

Presidential Candidates Support Generics

Presidential candidates Barack Obama and John McCain support the increased use of generic medications and investments in new treatments. Sen McCain supports faster entry of generic drugs and safe reimportation to enhance competition in the market, according to senior policy adviser Douglas Holtz-Eakin.

Pharmaceutical provisions in Sen Obama's "Plan for a Healthy America" call for the increased use of generic drugs in Medicare, Medicaid, and the Federal Employee Health Benefits Program, and a generic pathway for biologic drugs. His plan also would allow Americans to purchase their drugs from other developed countries if the drugs are safe and the prices are lower outside the United States.

Both candidates' platforms have pledged support for biomedical research and greater use of health information technology.

Teva to Acquire Barr

Teva Pharmaceutical Industries Ltd expects to acquire Barr Pharmaceuticals Inc by the end of this year, yielding a combined company with >500 currently marketed products, >200 Abbreviated New Drug Applications pending with the FDA, and annual brand sales of >$120 billion, the 2 companies report.

Both parties are currently complying with customary requests for information from the Federal Trade Commission. The acquisition is expected to bolster Teva's specialty pharmaceutical platform through the addition of Barr's substantial women's health portfolio to Teva's respiratory franchise.

"This is a transaction in which 2 great, strong companies are joining forces to capture an even greater share of the growing opportunities in generics," noted Shlomo Yanai, president and chief executive officer (CEO) of Teva.

Bruce Downey, Barr's chairman and CEO, concurred, noting that the acquisition, "will enable Teva to capitalize on Barr's portfolio of unique generic and proprietary products, benefit from our capabilities in biologics, and expand its presence in important Central and Eastern European markets."

OIG Spots Medicare Savings

A recent examination of Medicare reimbursement for the cancer drug irinotecan found that the amount Medicare paid for the drug ($126.31) exceeded the average manufacturer sales price ($51.59) by 145%. The calculations are from the US Department of Health and Human Services Office of the Inspector General (OIG), which collected and analyzed pricing information from 7 manufacturers of irinotecan. The FDA approved the first generic version of the drug in February 2008.

The OIG pointed out that lower-priced generic versions of the drug accounted for the vast majority (86%) of irinotecan sales during March 2008. The average manufacturer sales price for generic irinotecan was approximately $41. The agency estimates that, based on this average manufacturer sales price, Medicare expenditures for irinotecan would have been reduced by $6.5 million in that month alone. The report also notes that the underlying pricing issues it identified are "not limited to irinotecan."

Based on its findings, OIG is recommending that the Centers for Medicare & Medicaid Services expedite its process for establishing Medicare payment amounts to ensure that payments for drugs with newly available generic versions accurately reflect market prices.