Dr. Scott Gottlieb is back in the private sector and took the time to give the attendees at the AAM conference a brief overview of his experience as Commissioner.  Dr. Gottlieb spoke about the creation of the Competition Action Plan which addressed action on the following issues:

  • Gaming the system through REMS and restricted distribution systems and patent issues
  • Devising a path forward for faster approval of complex generic drug products
  • Anticompetitive tactics

He also spoke about what, in his opinion, needs to be done through legislation and policy changes to improve the drug pricing and shortage issues:

  • For drugs and biologics, the issue of rebates and placing generics and biosimilars on branded tiers for reimbursement prevents early entry into the market and costs patients tons of money.
  • Reimbursement for products that are constantly in shortage needs to be improved to incentivize forms to manufacture these drugs that have very low margins, or where firms are actually losing money on the product.

Other issues he touched on included:

  • Medicare Part D has no competitive competition built into the system.
  • Discounts and rebates erode competition (as noted above).
  • Lack of redundancy in drug manufacturing leads to drug shortages. (Dr. Gottlieb gave an example of the recent hurricane in Puerto Rico, and how most firms were really devastated, but the makers of Neupogen which apparently had unbelievable redundant systems in place, and the supply of their drug was never interrupted. He commented that, “if the world came to an end there would only be two things left, cockroaches and Neupogen!”)
  • Challenges to generics are no longer regulatory in nature, but are now commercial challenges. For instance, the ability of generics to obtain brand product samples subject of a REMS or restricted distribution system, prevents generic companies from being able to perform required bioequivalence testing in order to be able to submit a regulatory filing.  Policy should recognize that charging fair-market price for a sufficient quantity of the brand drug should overcome the constitutional takings argument that brand-name companies hide behind.
  • Policy changes are needed, especially for biosimilars, regarding bridging studies using foreign approved products result in an unnecessary barrier, especially when you know the foreign product is the same as the product approved and sold in the U.S. He even called having to perform bridging studies as required under the 505(b)(2), and the biologics regulations in these cases could be seen as unethical (having to subject patients or normal volunteers to unnecessary clinical testing) because you already know what the results will be.
  • The economic value of 180-day exclusivity has eroded because of the pile of patents that brand-name companies accumulate on products.

His insights were very valuable and interesting.  As a physician, regulator and economist, Dr. Gottlieb presents a unique perspective and understanding of the issues facing all of us in the industry.