Transcript Rawson"s slides

Health Care Reform, Spending Cuts and Drug
Approvals: What to Expect From the Obama
Administration’s Second Term
.:Kate Rawson
.:Prevision Policy LLC
.:January 9, 2012
Copyright © 2013 PrevisionPolicy. All rights reserved.
Credit Where Credit is Due
The Prevision Policy Team
Cole Werble, Founding Member
Michael McCaughan, Founding Member
Ramsey Baghdadi, Founding Member
Kate Rawson, Senior Editor
Laura Helbling, Reporter/Analyst
Material from this presentation is derived from
interviews with company executives and investors,
and from transaction data tracked by Windhover
Information Inc., publisher of
The RPM Report.
Copyright © 2013 PrevisionPolicy. All rights reserved.
Agenda





“Status Quo” Election

Major agency heads expected to remain in office

Congressional changes due to retirements and primary defeats
Affordable Care Act Survives (Barely)

Ruling is generally a positive for biopharma companies

SCOTUS ruling on Medicaid expansion is one downside; IPAB impact is worrisome to industry
FDA Innovation & Safety Act

New incentives for drug development in unmet areas (antibiotics, rare disease, “Breakthrough”)

“Fixes” drug shortage problem

Provisions to increase manufacturing quality of facilities overseas
FDA Drug Approvals: It Was a Very Good Year

“The Program”: focus on novel drugs with more meetings, greater transparency
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Review times lengthen for novel drug and biologics

Will it improve first-cycle review percentage? Hard to improve on near-perfection
Congress Avoids the Cliff: What Does That Mean for Rx Risk?

Usual suspects could be on the chopping block

Series of smaller cuts vs. a “Grand Bargain”

Big question is whether pharma can protect Part D rebates for dual-eligibles
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Life After 2012
The Year of the Patent Cliff
 Lipitor, Plavix, Zyprexa, etc.
A Wild Year in Washington
 PDUFA V/FDASIA
 Supreme Court ACA Review
 Election Day
Caps a Disastrous Decade
 Pipeline Drought
 Death of the Blockbuster
 Corporate Downsizing
BUT THERE IS HOPE!
4
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A “Status Quo” Election…
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…Means “Status Quo” Agency Leadership
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Affordable Care Act Survives (Barely)
"It is not our job to save the people from
the consequences of their electoral choices.”
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Affordable Care Act Survives (Barely)
•Ruling is Positive For Biopharma; Robust Growth Expected…
•CMS projects national drug spending be 8.8% in 2014 (versus 2.4% in 2013)
•4.7 percentage points faster than in the absence of health care reform
•Medicaid enrollment to increase by up to 19.6 million people in 2014
•Retains IP protections contained in the biosimilars provisions in the ACA
• …But There Are Potential Downsides
•SCOTUS decision allows states to opt out of Medicaid expansion risk-free
•Impact of Independent Payment Advisory Board (IPAB) yet to be seen
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2013: A Year of Implementation
Affordable Care Act
Oct. 1 Deadline to Launch
Exchanges
Medicaid Expansion Still
Fluid
Final Regs Coming Soon:
•“Sunshine” Act on
Provider/Pharma Payments
•Medicaid Rebate Rule
FDA Safety & Innovation Act
•Incentives for Antibiotics
•Biosimilar Pathway Taking
Shape, SLOWLY
•Major Resources for Generic
Drug Reviews
•Supply Chain Impact
•Foreign Inspections
•Shortage Response
•Compounding
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Innovation In FDASIA
 “Breakthrough Therapies”
 Hyper-Fast Development for Drugs That Show Extraordinary
Clinical Efficacy
 Vertex has two: ivacaftor and ivacaftor/VX-809 combo for CF
 “Qualified” Infectious Disease Agents (GAIN Act)
 Five-Year Added Exclusivity For Anti-Infectives/Anti-Fungals
Targeting Priority Infections
 “Enhanced” Accelerated Approval
 Codifies AA, Directs FDA to Update Guidance/Regs
 Does NOT Modify Approval Standard
 Rare Disease Provisions
 Pediatric Rare Disease Voucher
 Pediatric Exclusivity Made Permanent
10
 Single-Enantiomer Provision Extended Five Years
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Implications of “Breakthrough” Therapies
“What I think FDASIA does more than
had been done previously is it says to all
of FDA, management and staff, ‘Get
into this stuff.’…
“If there’s a process for identifying
things that are so impressive-looking
that you’re going to designate them as
breakthrough, the involvement should
be not just at the division level, but
broader than that. You’re going to have
Jenkins in the room and maybe Janet.
We should all be paying attention to
how we do that.”
Bob Temple, FDA/CMS Summit
December 11
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GAIN Act: Anti-Infective Incentives
“There's no area that we're
working on harder than trying to
develop pathways that are
feasible and scientifically
rigorous for developing and
approving new antimicrobials. It
is a public health crisis. We need
new antimicrobials.”
-- John Jenkins, FDA/CMS
Summit
December 10
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The “Lake Wobegon Effect”
There are now at
least 16 (!)
“Special”
designations at
FDA
FDA: Where All The Drugs Are Above Average
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Drug Shortages: Unprecedented Attention
FDASIA “Fixes”
The Shortage
Problem
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Congress Has Now “Fixed” This Problem…
Even If No One Knows How…
What Is In:
•More Mandatory Reporting by
Pharma
•Non-Compliance Publicized, not
Punished
•“Flexibility” For Recovering
Manufacturers
•FDA Task Force
•Inter-Agency Coordination
What Is Not:
• Change ASP/AMP Formulas
• Incentivize Quality/Reliability of
Supply
• Medicaid Rebate/340B “Holiday”
• All Subject to Further Study
• GAO Report Due in 18
Months
•Input from Stakeholders, including
3d party Reporting
•Limited Hospital Re-Packaging
•Intra-System Use Only
Ideas “On The Shelf”
For Next Time….
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FDASIA: Supply Chain Elements
 “Upstream” Provisions Included
 Manufacturing Registration, Foreign Inspection, Import Controls
 “Good Import Practices” to Match GMP, GCP Model
 “Downstream” Deferred
 New Anti-Counterfeiting Provisions Included
 Pedigree, Track-and-Trace Are Not
Track and Trace Discussions Continue;
Draft Legislation Released For Public Comment
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Compounding The Issue…
Rx Compounding Legislation Likely in
2013
May Be Vehicle for Additional Measures on
Supply Chain
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PDUFA: Perpetual FDA Reform
Routine Maintenance for FDA
Congress Hauls in FDA Every 5 Years and Looks
Under the Hood
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FDASIA and PDUFA V: Two Key Texts
FDASIA
“The Law”
PDUFA V
The “Goal
Letter”
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Policy Zig-Zag
Lasting Initiatives
Unfulfilled Ideas
PDUFA I
1992-1997
Actionable deadlines, broader
delegation of approval authority
within FDA
FDAMA
Innovation
(PDUFA II)
1997-2002
Meeting schedules, special
protocol assessments; fast-track,
rolling NDA submissions
Dissemination of off-label
information; NIH clinical trial
registry
PDUFA III
2002-2007
Good review practices; Pediatric
drug testing
FDA increased safety authority
for two years post approval
FDAAA
Drug Safety
(PDUFA IV)
2007-2012
REMS, Phase IV mandatory
studies, NIH clinical trial registry,
active post-market surveillance
(Sentinel)
DTC review, antibiotic
incentives, priority review
vouchers, FDA staff
publication rights, ReaganUdall Foundation
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UFA Multiplication
PDUFA
ADUFA
AGDUFA
MDUFMA
DTC Fees*
Tobacco Product Fees
Food Safety Fees
BsUFA **
GDUFA **
*Enacted, but never collected; **New!
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Towards 100%?
FY 2011
FY 2012
FY 2013
$879 mil.
$1,326 mil.
$1,969 mil.
Budget
Authority
$2,459 mil.
$2,506 mil.
$2,517 mil.
Total
Program
$3,339 mil.
$3,832 mil.
$4,486 mil.
34.6%
43.9%
User Fees
User fees as 26.3%
% of Total
User fees =
• 60% of premarket review
• 75% of generic drug activities
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PDUFA V: Getting With “The Program”
• Applies to NMEs Only
• Two Month LONGER Reviews (12 or 8 months)
• First Time in PDUFA Era that Slower is Better
• Buys Time for Inspections, REMS Negotiations
• Pre-NDA Meeting is Vital
• Though Technically Optional
• Limited Opportunity to Supplement Filing
• Expect RTFs for Incomplete Applications
• Greater Emphasis on Planning Review
• Multiple Check-Ins With Sponsor
• Late-Cycle Meeting is Key Innovation (and Already
Controversial)
• Sponsors Want “Verbal Complete Response”
• FDA Management Emphasizing Process Review
• Decision Maker Engaged
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Getting With “The Program”
Source: Office of New Drugs Director John Jenkins, FDA/CMS Summit for Biopharma Execs Dec. 10
http://www.fda.gov/downloads/AboutFDA/CentersOffices/OfficeofMedicalProductsandTobacco/CDER/UCM331454.pdf
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Getting With “The Program”: Implications
• Better Meetings:
•
Outside Consultants in the Room
• Fewer, Less Exciting Advisory Committees:
• Late-Cycle Meeting Eliminates “Surprises”
• New Communication Challenge for Sponsors:
• What to Say About FDA Updates?
• Unlikely to Improve “First-Cycle” Performance:
•
Tough To Beat Near Perfection
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Hard To Improve on Recent Record
NME
Approval
Rate is 80%
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A Clear Success (1): Faster Reviews
Source: Office of New Drugs Director John Jenkins, FDA/CMS Summit for Biopharma Execs Dec. 10
http://www.fda.gov/downloads/AboutFDA/CentersOffices/OfficeofMedicalProductsandTobacco/CDER/UCM331454.pdf
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A Clear Success (2): No More “Drug Lag”
Source: Office of New Drugs Director John Jenkins, FDA/CMS Summit for Biopharma Execs Dec. 10
http://www.fda.gov/downloads/AboutFDA/CentersOffices/OfficeofMedicalProductsandTobacco/CDER/UCM331454.pdf
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Less Clear: More New Medicines?
39 approvals
approvals
Source: Office of New Drugs Director John Jenkins, FDA/CMS Summit for Biopharma Execs Dec. 10
http://www.fda.gov/downloads/AboutFDA/CentersOffices/OfficeofMedicalProductsandTobacco/CDER/UCM331454.pdf
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The Drug Class of 2012
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The Year-End Approval Rush
•ARIAD’s Inclusig for two rare forms of leukemia
•Human Genome Sciences’ raxibacumab for inhalational anthrax
•Novartis’ Signifor for Cushings disease
•NPS Pharma’s Gattex for short bowel syndrome
•Aegerion’s Juxtapid for a rare cholesterol disorder
•Bristol-Myers Squibb’s Eliquis anti-clotting drug
•Janssen’s Sirturo for pulmonary tuberculosis
•Salix’ Fulyzaq first drug approved for HIV-associated diarrhea
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Dueling Cartoons
December 31
Going Over the Cliff
January 1
We Have a Deal!
Sort of….
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The “Deal”
Done (“Permanent” Changes)
Tax Rates
Alternative Minimum Tax “Patch”
Estate Tax
Dealt With (For One Year)
“Doc Fix”
Tax Extenders (R&D Credit)
Unemployment
Farm Bill
Let’s Try this Again
March 1
Unresolved
Sequester
Debt Ceiling
Deficit Reduction
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A Grand Bargain in 2013?
Divided Government Can Work
Balanced Budget Act of 1997
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Medicare Cuts and Pharma
“Round Up The Usual Suspects”
Part D Rebates for Duals
(ASP+4%?)
Change in Part B Payment
Move Part B Drugs To D
Generic Incentives
Least Costly Alternative
End “Pay for Delay” Settlements
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Key Takeaways
 Health Reform Will Proceed
 Pharma already paid for insurance expansion in form of new fees, rebates
and discounts in 2010
 SCOTUS ruling on Medicaid expansion lowers number of newly covered
 Administration will continue to push for implementation of the Independent
Payment Advisory Board; industry would need to seek separate “repeal” bill
 Positive FDA Environment Will Continue
 Seamless leadership = uninterrupted FDASIA/PDUFA V implementation
 Climate for new drug reviews as good as it gets; “drug lag” no more
 User fees increasingly critical for FDA resources
 FDA Congressional Oversight “Tinkering,” Not Major Overhaul
 Rx compounding legislation likely for 2013
 Fiscal Cliff Deal Provides 85-Day Reprieve From Part D Rebates
 Biden-McConnell deal excluded major provisions that would affect industry;
sequestration avoided
 Key question will be whether Part D rebates for duals can be protected
Copyright © 2013 PrevisionPolicy. All rights reserved.
Thank You!
Resources

FDASIA Website

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GDUFA Website
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http://www.fda.gov/ForIndustry/UserFees/GenericDrugUserFees/default.htm
PDUFA V Website
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http://www.fda.gov/RegulatoryInformation/Legislation/FederalFoodDrugandCosmeticActFDCAct/
SignificantAmendmentstotheFDCAct/FDASIA/ucm20027187.htm
http://www.fda.gov/ForIndustry/UserFees/PrescriptionDrugUserFee/ucm272170.htm
Presentations

John Jenkins, FDA/CMS Summit for Biopharma Executives Dec. 10

Gregory Geba, FDA/CMS Summit for Biopharma Executives Dec. 11

www.TheRPMReport.com

www.PrevisionPolicy.com
[email protected]
202-297-6420
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Available on request