Premier’s oral comments at FDA hearing on Administering the Hatch-Waxman Amendments: Ensuring a Balance Between Innovation and Access Last Updated: July 18, 2017
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My name is Wayne Russell, Vice-President of Pharmacy for Premier Inc.  Premier healthcare alliance serves approximately 3,750 leading hospitals and health systems and 130,000 other provider organizations. Premier is a leading healthcare improvement company, uniting an alliance of hospitals and other providers to lead the transformation to high-quality, cost-effective healthcare. With integrated data and analytics, collaboratives, supply chain solutions, and advisory and other services, Premier enables better care and outcomes at a lower cost. A key component of our alliance is the Premier Pharmacy Program, which combines essential clinical data with purchasing power to deliver reduced costs, improved quality and safety and increased knowledge-sharing with other healthcare professionals. I am responsible for the contracting relationship with the pharmaceutical industry including both brand and generic manufacturers, distributors and wholesalers, pharmacy technology and services, plasma derived products and vaccines and biosimiliars. Sourcing committees made up of clinical experts from our member hospitals help evaluate current and emerging pharmaceuticals for contracting and patient care.

FDA evaluation/approval process for older medications including DESI drugs

Background on Issue/Comments:

Because of the disparity in the FDA approval standards between 1938 and 1962, Congress required that drugs approved in that time frame be reviewed again based on the updated safety and efficacy requirements. FDA carries out these requirements through a process called the Drug Efficacy Study Implementation (DESI). FDA later also included pre-1938 drugs in the review as well as in an initiative called the “Prescription Drug Wrap-Up.”

While FDA’s efforts to obtain safety and efficacy data on all drugs in the marketplace is laudable, many of these drugs have a long history of safety and efficacy. Because of their length of time on the market, most of these products have maintained relatively low prices. Premier recommends options for changing the process at FDA to allow more notice for manufacturers and providers regarding FDA action on these older drugs when immediate removal from the market is not necessary. We recommend that FDA announce in the Federal Register the first NDA approval for an older medication that is currently manufactured by other companies. We further recommend FDA allow for 18 to 24 months after that notice before requiring current manufactures to exit the market. This would give providers, purchasers and consumers time to engage with manufacturers on their decision-making regarding seeking FDA approval of a competing drug to the NDA. In addition, if a manufacturer has an application already at the agency, they should not be required to leave the market.

The disruption to the marketplace when other products are required to exit as a result of FDA’s policy should not be underestimated. When manufacturers of these older drugs leave the market (e.g., guaifenesin, levothyroxine, digoxin, morphine, colchicine, etc.), providers have experienced significant drug price increases due to the lack of competition. For example, Neostigmine was priced at $33 (for 10 vials of 10mg/mL) in 2009. The new “brand” Bloxiverz, approved by FDA in the same package size, jumped to $150 in 2013 and continued to experience price increases up to $938.12 by 2015 when other manufacturers of these older unapproved drugs exited the market. While not anywhere near where it was prior to the removal of other manufacturers in the market, the price dropped to $580.90 in 2015 with two other manufacturers entering the market.

Two other examples show the same issues.  Potassium Chloride in 2014 sold for $40.86 for 20MEQ/15ML and when other manufacturers were require to leave the market, the price jumped to $236.93 in 2016.  This price increase sent a shock wave through the health community for a drug that has long been deemed safe and effective with no research and development cost attached to the product.

Potassium Chloride 20MEQ/15ML LIQUID

The last example, Epinephrine, was $69.16 for a vial in 2015 and jumped 352% to $312.50 in 2016 when other manufacturers were required to leave the market by FDA. The price has continued to raise another 20% this year on a drug that has long been on the market with no “new” indications or therapy improvement.

Epinephrine Vial

On behalf of our hospitals, physicians and patients we request that FDA seriously reconsider the administration of this program and the impact it is having on the cost of care.