President Joe Biden campaigned on the goal of lowering prescription drug costs. So far, those promises haven’t amounted to much. But late last week, the president unveiled a series of initiatives taking aim at pricing, anti-competitive practices, and more.
In an executive order penned Friday, Biden doubled down on efforts to combat high prescription drug prices in the U.S. by promoting generic and biosimilar competition, allowing Medicare to negotiate drug costs and more. Despite the administration’s lofty ambitions, it remains “far from clear” whether Biden’s goals will pan out, one antitrust and competition lawyer said.
The order calls on the Department of Health and Human Services to lay out its strategy to combat costly prescription drugs within 45 days and take on the “recurrent problem of price gouging” in the U.S. The president also tasked HHS with developing a plan to “enhance” local pharmaceutical supply chains.
Part of that framework may involve advancing a Trump-era policy, known as section 804 Importation Programs, that would allow the U.S. to import certain generic drugs from Canada.
Biden also re-upped his bid to allow Medicare to negotiate drug prices. Earlier this year, Biden’s budget plan for fiscal year 2022 voiced support for “reforms that would bring down drug prices by letting Medicare negotiate payment for certain high-cost drugs.” Still, Biden left drug pricing provisions out of his American Families Plan in late April, punting the issue to a divided congress where results remain uncertain.
Potential imports and Medicare negotiations aside, Biden charged the HHS with promoting generic drug and biosimilar competition, with the specific goal to make approvals of those copycat medicines “more transparent, efficient, and predictable.” HHS will further team up with the Federal Trade Commission to pinpoint and address efforts to hinder the entrance of biosimilars and generics, including “false, misleading, or otherwise deceptive statements” about the efficacy and safety of those products.
A recent lawsuit against Teva Pharmaceutical by Mylan, which has merged with Pfizer’s Upjohn to create Viatris, offers some insight into the behavior the Biden Administration is targeting. In that suit, Mylan claims Teva orchestrated a “comprehensive and sophisticated scheme” to delay the entry of copycats to its branded multiple sclerosis med Copaxone. Teva accomplished this, Mylan asserts, by misleading doctors about the efficacy of Copaxone generics, forging prescription-limiting deals with pharmacy benefit managers and more. Teva didn’t respond to Fierce Pharma’s request for comment at the time.
The Administration has also set its sights on the patent system and “pay-for-delay” practices surrounding generic meds. Working with the FTC, the FDA will aim to fine-tune the pharmaceutical patent framework so that it doesn’t “unjustifiably delay” the entry of copycat meds.
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Takeda, Endo, AbbVie and Allergan are just a few drug majors who’ve faced antitrust lawsuits over their pay-for-delay deals, forged between originator companies and generics makers to postpone the entry of copycat meds. Back in 2019, California Governor Gavin Newsom signed a new bill that made California the first state to ban the anticompetitive practice.
Patent and other related laws have often been “misused” to delay generic and biosimilar competition “for years and even decades,” Biden said in the executive order.
The executive order signals “the clearest statement yet” that the Biden Administration “intends to put antitrust and competition issues … front and center in its economic policy,” Andrew Lacy, a partner in Goodwin’s antitrust and competition practice, said via email. Despite a “wish list” of policy objectives, “as a practical matter, it is far from clear that the antitrust and other agencies will be able to deliver on the order’s goals,” he said.
Overall, the order aligns with promises Biden has already made. It could have been “more negative” for the pharma industry, too, financial services group ODDO BHF wrote in a note to clients. The analysts singled out Novo Nordisk and Roche as two drugmakers likely to feel the squeeze from Biden’s proposals, citing the companies’ geographical reach and generic pressure.
