Competition Will Allow Drug Price Control, Say Experts

At the recently held Biotechnology Industry Conference in Philadelphia, panelists exchanged thoughts on reining-in the escalating costs of drugs, especially specialty products. While pharmacy benefit managers and health plans have tiered formularies, so they can negotiate costs and the product with the bigger-discounted price can be the preferred drug on the formulary, panelists suggested that the FDA can play a part too. Accelerated review of "me-too" products would increase market competition entailing a drug price competition, as was seen with Sovaldi and Viekira Pak for hepatitis C, they said.

Scott Gottlieb, MD, resident fellow at the American Enterprise Institute, who participated on the panel, said that an accelerated review of competitior products would halt product monopoly in a specific drug class sooner. Dr Gottlieb reiterated what he said at a recent panel discussion hosted by The American Journal of Managed Care, the Oncology Stakeholders Summit. "Current policies do not often allow second- and third-in-class drugs to enter the market as efficiently as first-in-class drugs," he said during the AJMC discussion, explaining that the regulatory process for first-in-class drugs is much different from the regulatory process for subsequent drugs. Policy changes that allow subsequent drugs a more favorable access to the market could help address concerns regarding drug pricing, he said.

During the BIO panel, Dan Durham, interim CEO of America's Health Insurance Plans (AHIP) agreed with Dr Gottlieb, saying that AHIP has always advocated such a tactic. He added that while competition in the market is beneficial to the consumer because it brings down drug price, it is also good in terms of product safety, because the second and third products can be the back-up in case the first-to-the market drug has safety problems.

Gottlieb said that the recent industry trend where drug manufacturers have dropped products from launching only because they were second or third to launch in a particular drug class is not good. Not just the pricing issue, but he said it's because companies fear it'll be several years before they can expect an uptake.