FDA’s Gottlieb pushes new generics rules to encourage price competition

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The FDA hasn't traditionally weighed in on drug pricing, but that's not stopping commissioner Scott Gottlieb from rolling out new rules designed to bring down rising costs.

The FDA’s role in drug development has always been to green light safe and effective drugs—not to influence how companies price them. But that was before consumers protested price hikes on Mylan’s EpiPen and other drugs, and it was before President Donald Trump accused the pharma industry of “getting away with murder” on pricing.

Now the FDA’s new commissioner, Trump appointee Scott Gottlieb, M.D., is embarking on a series of initiatives aimed directly at bringing down rising drug prices. In a blog post yesterday, Gottlieb outlined the first policies to be implemented under the Drug Competition Action Plan, which are aimed specifically at “complex generic drugs.” Those are medicines that are complicated for generics manufacturers to make because they are protein-based or, like EpiPen, they require intricate delivery technologies such as auto-injectors.

As Gottlieb explained, inventors of complex drugs have almost complete freedom to hike prices at will. “These medicines generally have at least one feature that makes them harder to ‘genericize’ under our traditional approaches,” he wrote. “As a consequence, these drugs can face less competition. In some cases, costly, branded drugs that are complex drugs have lost their [patent] exclusivity, but are subject to no generic competition.”

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To encourage generics makers to develop complex products, the FDA issued two draft guidances. One explains how companies can submit requests to the agency for pre-submission meetings where they can be advised on the exact steps they need to take to develop generics that are likely to be approved.

The second is aimed specifically at advising companies wishing to develop copycat versions of five peptide-based drugs that are no longer protected by patents but face very little competition. They include the diabetes drug liraglutide, the main ingredient in Novo Nordisk’s Saxenda, and the osteoporosis drug teriparatide, which is marketed by Eli Lilly as Forteo.

The guidance is meant to help generics makers use peptide-synthesis technology to demonstrate that their products are the same as the original and that the risk of an immune response is no greater than it is with the branded product, Gottlieb said. “We’re doing all of this without sacrificing the scientific rigor of the process one bit,” he wrote. The approach, he added, “is focused on adopting more rigorous and sophisticated science, including sophisticated quantitative methods and computational modeling, in drug development, evaluation, and review.”

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Gottlieb hasn’t been shy about pulling the FDA into the drug-pricing debate. At a recent cancer summit sponsored by the American Association for Cancer Research (AACR) and Genentech, he said encouraging price competition with both branded and generic drugs would be essential to making cancer care accessible to patients. That starts with changing how the FDA works with companies to get products to market. “How you structure clinical trials, the kind of clinical evidence the agency asks for, preclinical studies,” he said, “there’s different ways we can incorporate new technologies, new methodology to make that process more efficient.” The challenge, he added, is “we’re reluctant to change sometimes, and if we don’t change, [pharma compaies] won’t change.”

Some companies are already feeling the effects of Gottlieb’s focus on encouraging generic competition. In August, Valeant’s heart drug Isuprel faced its first significant competitor: Nexus, which won FDA approval for its generic copycat. Isuprel became the subject of a Congressional probe when Valeant raised its price 300% to $881 per vial.

There will be more pricing initiatives to come from the FDA, Gottlieb promised in his blog post. The agency has started holding workshops to identify new quantitative modeling approaches and other tools that might streamline generic drug development. It’s all “part of a broader effort by the administration to address the high and rising cost of drugs,” he wrote, “and in the coming months, we’ll advance other policies aimed at enabling generic competition to complex drugs.”