Many scholars posted articles relating to FDA law in February and March. To do these articles justice, I am breaking my report into three parts. Below, Rachel Sachs takes on drug prices by proposing we no longer require payers to cover new drugs simply because FDA has approved the drugs; Laurie Beyranevand and Diana Winters would have the states step in where FDA has not been, in their view, aggressive enough (thus, banning substances in food that are deemed safe by their manufacturers but not reviewed by FDA, and banning use of antibiotics in food-producing animals for purposes of growth enhancement); and Robin Feldman and colleagues publish a succinct new summary of their empirical research on citizen petitions that relate to pending generic drug applications.
Rachel Sachs, Delinking Reimbursement.
In this careful and thorough article forthcoming in the Minnesota Law Review, Professor Sachs argues that drug pricing concerns could be addressed in part if insurers were not required to cover drugs simply because the drugs are approved by FDA.
Her primary focus appears to be Medicare and Medicaid, which must essentially cover all FDA-approved drugs. But she also considers private payers, which are subject to some mandatory coverage rules under both state and federal law. Part II explores the impact of the link. For instance, she argues that policy proposals to reduce the evidentiary standard for new drug approval would likely increase spending, because the newly approved drugs would be covered. Policymakers would do well to focus on subsection II-B, where she argues that policy proposals to control drug prices overlook the link — for instance, that giving Medicare the authority to negotiate for lower drug prices would not, in fact, reduce drug spending. She says it much better than I could:
“Medicare might be able to achieve some savings where there is already market competition and where Medicare is permitted to cover two drugs in that class, although it is difficult to see why private plans have not negotiated such deals already. But for the six protected classes in which Medicare must cover all products, or for expensive new drugs with few, if any, substitutes, Medicare cannot walk away from the table if it does not like the deal companies are offering.”
In Part III, she explores elimination of the link between FDA approval and insurance coverage. First, she admits it will reduce access to some drugs, because insurers will choose not to cover some drugs that currently they are required to cover. She’s concerned about expensive orphan drugs and about other less expensive drugs that end up being expensive over time — such as the Hepatitis C cures, including Sovaldi. If insurers could refuse coverage, they might secure discounts. Second, she argues that forcing companies to “earn” coverage may prompt them to do different or additional research — such as comparative effectiveness studies. This could give payers enough information to nudge patients towards less expensive alternatives and stimulate price competition.
My favorite section is Part IV, which describes three delinkage models — the healthcare program for veterans administered by the Department of Veterans Affairs (VA), the appraisals conducted in Europe (for instance by the UK’s NICE), and coverage of medical devices in the United States. This section is helpful because it introduces a word of caution about her thesis. For instance, she admits that the NICE technology appraisals have reduced access to important cancer medications, creating political issues for the program, and she notes that it has produced lots of cost effectiveness information but not, in fact, comparative effectiveness data.
Part V offers three “intermediate” solutions — (1) delinkage limited to certain classes of drugs or drugs with particular characteristics, (2) greater collaboration between CMS and FDA (for instance by giving CMS a role in FDA’s decision whether a particular drug is eligible for accelerated approval), and (3) using insurance as a tool for promoting innovation, which she has covered in another article.
Laurie Beyranevand & Diana Winters, Retooling American Foodralism
In this essay, Professors Beyranevand and Winters argue that state and local governments should play a more active role in food regulation given “gaps” they identify in federal oversight. Continuing an argument that Winters made in a full length law review article two years ago, they argue that state experiments with respect to food law can cause friction with federal law and other state laws but can also lead to important changes at the national level.
Part II describes two “regulatory gaps” where the authors believe the states should play a role.
First, they suggest the states could ban substances in food that are exempt from premarket approval under FDA’s food additive regime. In brief, as a general rule a food additive must be the subject of a food additive petition (requesting premarket approval). The term “food additive” does not include a substance that is “generally recognized . . . as safe” (GRAS), however, and the determination that a substance is GRAS is made by the company in the first instance. FDA strongly encourages companies to notify the agency about GRAS determinations, but it does not (and in its view cannot) require notification. Beyranevand and Winters suggest that states might ban substances determined to be GRAS by food manufacturers.
Second, they suggest that states could — as California has already done — prohibit the use of antibiotics in food-producing animals for any reason other than disease prevention (and presumably treatment) and also require that any administered antibiotics be prescribed by a licensed veterinarian. This is a response to use of low-level (“subtherapeutic”) doses for growth enhancement — also known as a “production use” rather than a “therapeutic use” of an antibiotic. FDA has issued guidance recommending that medically important antimicrobials be used only for treatment, control, or prevention of disease, and it has been “encouraged” by the “overwhelmingly cooperative” reaction of industry (quoting Beyranevand and Winters, who quote FDA). But the authors argue that FDA has chosen not to act vigorously, which provides a significant opportunity for states to act.
They admit that state action in these areas would face preemption challenges and express concern that uncertainty may deter states from acting, which they argue is “detrimental to the rigorous experimentation needed in food policy today.”
Robin Feldman, John Gray, and Giora Ashkenazi, Empirical Evidence of Drug Companies Using Citizen Petitions to Hold Off Competition
This piece summarizes a study the authors published in 2017 in the Stanford Technology Law Review, with a similar title. The authors reviewed all citizen petitions filed with FDA between 2000 and 2012, focusing on those relating to generic drugs. Congress amended the FDCA in 2007 to require that FDA respond to petitions relating to generic drugs within 180 days (now 150 days). The authors take the position that this five month “delay” might be “worth hundreds of millions of dollars in revenue” for a “blockbuster drug.”
They found that 33 petitions relating to generic drug approval were filed within six months of the generic drug approval; more than 25 were filed between six and twelve months before generic approval; and more than 15 were filed between twelve and eighteen months before approval. The “trend,” they write, “is toward an increasing number of petitions as one moves closer to the final approval date.” Indeed, they find that in the post-2007 period, “a remarkable 46 percent of petitions were filed within a year of generic approval.”
They generally refer to petitions relating to pending generic applications as “delay-related” petitions and write that the results “suggest” petitions are “a last ditch effort to delay competition just a little longer.” The punchline is here: “when so many generic applications are approved within six months — the equivalent of 180 days — of when a citizen petition is filed, and the FDA had 180 days to respond to a citizen petition, the relationship does not seem to be mere coincidence.” That said, they add that “delving deeper into this striking correlation between the FDA’s deadline of 180 days and the plurality of citizen petitions filed within 180 days of generic approval would be an interesting avenue for future research.”