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US FDA rolls out guidelines to lower drug costs, preserve antibiotic market

U.S. Food and Drug Administration Commissioner Scott Gottlieb issued a set of three new guidelines for drugmakers aimed at supporting better price negotiations, driving competition and securing reimbursement.

The documents come as Trump administration officials, including Gottlieb, are promoting their strategy for lowering U.S. prescription medicines prices, which was unveiled May 11.

During a June 12 Capitol Hill hearing, Health and Human Services Secretary Alex Azar acknowledged the administration would be unable to keep President Donald Trump's May 30 promise that some "big drug companies" would "announce voluntary massive drops in prices" this week as a result of his plan.

A reported deal between the Centers for Medicare and Medicaid Services, or CMS, and insulin makers for lower list prices has so far failed to materialize as well.

"Insulin is one of the many essential drugs across all categories of pharmaceuticals — brand name, specialty and generic — to experience remarkable price increases," the American Medical Association said in a June 13 statement.

The group has asked the Federal Trade Commission and the Justice Department to monitor insulin pricing and market competition and take enforcement actions if needed.

But Gottlieb delivered on his vow — though later than he initially planned — to loosen rules on drugmakers' communications with payers and providers, which he said would result in lower prices for Americans.

Freer communications

The new guidelines — Drug and Device Manufacturer Communications With Payers, Formulary Committees and Similar Entities and Medical Product Communications That Are Consistent With the FDA-Required Labeling — are intended to make it easier for drug manufacturers and device makers to more freely discuss with payers and providers reliable scientific and economic information about unapproved uses of medical products and data not included in the labeling of therapies cleared for the U.S. market.

"This guidance will inform market participants developing contracts that include value-based arrangements how to communicate information about how a drug might impact outcomes that are important to purchasers like a health plan or hospital, but is not an endpoint that is expressly described in the drug's approved labeling," Gottlieb stated.

Product prices should be adjustable to reflect the value in how medicines are prescribed and the outcomes they deliver to control rising spending and reduce the burden of drug costs for consumers, he said.

In addition, selling models should be able to tie the price of drugs more closely to the usefulness of the clinical setting in which they are prescribed, Gottlieb said.

He said the administration wants to encourage competitive contracting based on measures of value that matter most to purchasers and patients, "not get in the way of these competitive negotiations."

The new documents tweak two sets of guidelines issued in the final days of the Obama administration, which were conceived after the agency was caught up in a series of legal battles over whether the medical product industry's communications with providers and payers were protected as free speech under the U.S. Constitution.

Software-like licensing for antibiotics

In issuing a third set of guidelines June 12 — Limited Population Pathway for Antibacterial and Antifungal Drugs — Gottlieb promoted the idea of moving to a reimbursement model in which hospitals would pay a fixed licensing fee for access to antibiotics restricted for use in patients infected with the most dangerous, multidrug-resistant pathogens.

A similar reimbursement system is used in the software industry.

To protect antibiotics from resistance, doctors have tried to limit their use.

But while needed, those stewardship programs have also resulted in a limited market, where drug developers are unable to recoup their investments, Gottlieb said.

To respond to that concern, he said the FDA has been in discussions with CMS and other agencies about potentially piloting the licensing model for antibiotics, under which hospitals would be granted the right to use a certain number of annual doses of the drugs.

Employing a licensing model for antibiotics would "create a natural market for drugs that meet certain public health criteria, by providing a predictable return on investment and revenue stream through more foreseeable licensing fees," Gottlieb said.

It would also put the institutions fully in charge of stewardship of those drugs, he said.

"Once they purchase the ability to access a drug, they would be stewards of its use up to a certain number of annual doses, which could be tied to the number of beds an institution has or its likelihood of encountering certain organisms," Gottlieb said.