Three members of Congress, a bipartisan trio that spans both the House and the Senate, have introduced the Price Relief, Innovation, and Competition for Essential Drugs (PRICED) Act in the House of Representatives and the Senate on Friday, June 24. The bill points to higher medication prices and if passed, would reduce the data exclusivity period for biologic drugs from twelve years to just seven.
The bill, clocking in at a whopping two pages, would amend the Reference Product Exclusivity (RPE) provisions in the Public Health Service Act (PHS Act), striking “12 years” and inserting “7 years” in place. Conforming amendments would be made throughout the Act where necessary. The PRICED Act would apply only with respect to a biological product for which the reference product … is licensed under [PHS Act] on or after” the date of enactment of the PRICED Act.
Such a reduction would have a large effect on the biologic industry: it would mean significantly more competition for branded biologic manufacturers from the biosimilar drug makers. The current twelve-year data exclusivity threshold for biologic products was set under a compromise in the Affordable Care Act. Since that time, President Obama has advocated for reducing that period to seven years through budget proposals, in an effort to cut healthcare spending.
According to Representative Janice Schakowsky, the sponsor of the bill in the House of Representatives, the PRICED Act would “foster competition and provide opportunity for more biologics to enter the marketplace and drive down costs.”
Senator Sherrod Brown believes that, “in the same way the entrance of generics helped increase competition and boost access to more affordable prescription drugs, an increased number of biologics and equally effective ‘biosimilars’ will provide additional competition in the marketplace and make life-saving drugs more affordable for consumers.”
Senator John McCain opined that the “PRICED Act would inject much-needed competition in the biologics market, bring down costs for live-saving drugs, and save billions in taxpayer dollars.”
Industry Reaction
Industry reaction has overall been very predictable: major trade groups oppose any efforts to shorten the period while generic groups support efforts. The Biotechnology Innovation Organization (BIO) argues that anything less than twelve years of exclusivity would have repercussions, i.e., stifled innovation, reduced drug access, and increased prices of drugs in the long run. They also noted that a “majority of biotechnology companies are small, private start-ups, heavily reliant on venture capital investment” and need the full twelve-year incentive.
The Generic Pharmaceutical Association (GPhA), on the other hand, argues that the legislation would “speed patient access to more affordable versions of some of the most expensive medicines” and that “as brand and specialty drug costs rise at a concerning rate, the association looks forward to working with Congress and others to ensure timely access to biosimilar medicines.”
What Does This Mean
This bill is introduced in the midst of several other important, and related, discussions and events. The Trans-Pacific Partnership (TPP) currently under negotiations, has caused high-level discussions on the exclusivity period, as some countries have pushed for a shorter exclusivity period under the deal (e.g., Australia only allows for a five-year exclusivity period), which United States negotiators have resisted.
This bill also comes shortly after the Supreme Court’s invitation to the Solicitor General to file briefs regarding the Sandoz and Amgen petitions for certiorari.
The likelihood that the PRICED Act will make its way through Congress and be signed into law by the end of President Obama’s term is pretty low. Even still, the bill is yet another sign of the concern on Capitol Hill over drug prices.