For the first time since the FDA’s Office of Generic Drugs (OGD) was authorized to address its approval backlog with industry-paid user fees, the agency has provided a top-level view of activity in the form of its first annual report. The highlight for the generic industry is the 580 approvals (along with 146 tentative) that were issued in 2015, which includes a record-setting 99 combined approvals in December alone.
The agency, which is in negotiations with Congress to reauthorize the user fee project, can also point to dramatic operational improvements. With roughly $300 million per year provided through user fees, the agency has been able to clear almost 90% of the backlog in generic applications. The backlog, which is defined as applications that were received before October 1, 2012, initially included 2,866 ANDAs and around two-thirds as many applications for substantial changes on previously approved drugs. At the end of the reporting period, 84% of the former and 88% of the latter had been resolved in one way or another.
As is frequently the case, however, it pays to read the fine print: specifically, the most common form of ANDA-resolution by a substantial margin was “Complete Response with an Inspection.” According to the agency, this constitutes “a written FDA communication to an applicant usually describing all of the deficiencies that the agency has identified in an application that must be satisfactorily addressed before it can be approved.” If a high percentage of the sponsors of these applications take steps necessary to address the deficiencies identified in their complete response letters, a lot of the “resolved” applications could wind up back in the agency’s workload. Given the speed with which the generic industry changes, it is possible that many sponsors walked away from these applications years ago but the complete response approach does not have the same level of finality as one might expect.
Less ambiguous and of perhaps greater importance for the future is the fact that the ANDA filing backlog has been eliminated for all practical purposes. Filing can be thought of as a “pre-review review.” In other words, this is the period during which the FDA performs an initial audit of a submitted application in order to determine whether it can move forward to the substantive review phase. As recently as August 2014, more than 1,100 applications were stuck in this particularly frustrating form of limbo. In a very short period of time, the OGD addressed this backlog and is now making filing decisions in an average of 40 days, with only one percent taking longer than two months.
To estimate costs associated with infused drugs discarded because they are left over after administration to a patient, Peter Bach of the Center for Health Policy and Outcomes at Memorial Sloan Kettering Cancer Center and colleagues looked at 20 infused cancer agents with single-vial packaging and weight-based dosing. In the January 20, 2016 issue of BMJ, they report a range of 1% to 33% in the amount of drug left over following administration. After accounting for differences in drug price, they found that the value of products that would not be received by a patient under recommended dosing scenarios equals $1.8 billion or 10% of the combined 2016 sales for these drugs. Roughly $1 billion more is paid to hospitals, clinics, and other providers in the form of “buy and bill” markups for left over portions.
In most other settings, it would be a simple matter to set aside the left over product and use if for the next “customer” but, as is usually the case, the rules and practices governing pharmaceuticals are not so straightforward. The CDC states that single-use vials “should only be used for a single patient” because “these medications typically lack antimicrobial preservatives and can become contaminated.” Although the FDA’s position is not as clear cut as the CDC’s, it also cites microbial contamination along with medication errors as factors that “may” cause problems. CMS’ position, however, is that “it is permissible for healthcare personnel to administer repackaged doses derived from [single-dose vials] to multiple patients, provided that each repackaged dose is used for a single patient in accordance with applicable storage and handling requirements.” Meanwhile, the US Pharmacopeial Convention allows sharing only if the remaining drug is used within six hours and handled by specialized pharmacies.
FOR IMMEDIATE RELEASE
Prescription Drug Utilization among Elderly Americans has Reached Plateau, Growth will Slow to 1/40th Rate of Preceding 20 Years.
FORT LAUDERDALE, FL, Sep. 30, 2013 – A new white paper from life-sciences advisory firm, VOI Consulting (VOI), shows that a confluence of technical, medical and social factors led to dramatic growth in per capita prescription drug consumption in the United States over the past 20 years. However, VOI’s long-range forecasts suggest that consumption levels have reached a saturation point with the result that the U.S. pharmaceutical market will not experience a similar wave of sustained, industry-wide growth in the foreseeable future. These findings support other recent research indicating that U.S. health spending will be less burdensome than previously expected but they are troubling from the perspective of the pharmaceutical industry. Although the impact of declining utilization growth is already being felt, the slowdown has generally been attributed to generic competition, cost containment, or a stricter regulatory environment. VOI’s analysis shows that declining utilization growth is, in fact, the most important structural challenge facing the industry.
The white paper finds, for example, that average consumption of prescription drugs among Americans over 65 went from 2.3 per month in 1990 to 4.1 per month in 2010, an increase of nearly 80% on a per-person basis. By comparison, VOI’s projections reveal that, through 2030, average monthly consumption in this population will increase by less than 2% over current levels. Expressed differently, growth in average consumption among elderly Americans was more than 40 times higher during the 1990 to 2010 period than will be the case over the 2011 to 2030 timeframe. Patients will continue to switch between different therapies but the average number of prescription drugs consumed per person has essentially stabilized.
This phenomenon, which VOI has dubbed “the utilization plateau,” means that changes in consumption will contribute very little to industry growth over the next two decades. As the white paper demonstrates, rising per capita utilization was responsible for a 39% increase in prescription drug volume in the 1990s and a further 16% during the first ten years of the 2000s. Due to the utilization plateau, however, per capita consumption will add only 3.1% to industry volume in the current decade and a meager 1.8% in the 2021 to 2030 period.
The other major contributors to prescription volume growth are a larger population and demographic changes, of which the most notable is the aging baby boomer generation. There is a widespread belief that the latter factor will provide a substantial boost to the pharmaceutical industry over the next 20 years but, according to VOI’s analysis, the aging population will lead to a 7% increase in volume during the current decade and 5% thereafter, far too low to offset the slowdown in utilization growth.
Todd Clark, VOI Consulting’s President and author of the report, sums up the situation, “in contrast to the environment most industry managers are accustomed to, there will be no rising tide to lift all boats. To survive and prosper, companies will need to maximize and maintain their share of a relatively stable market via smarter strategic decisions and more effective execution.” Aggressive pipeline management with an emphasis on speed-to-market and better adherence programs are seen as the most promising avenues to maintain vigorous sales growth.
These and other findings are explored in detail in the white paper, “The Utilization Plateau: Understanding Why the U.S. Pharmaceutical Market has Stagnated and What You Can Do to Avoid the Slow-Growth Trap,” which is available for free download at http://voiconsulting.com/pages/u-s-drug-utilization-plateau.
ABOUT VOI CONSULTING
Since 1998, Value of Insight Consulting, Inc. (VOI Consulting) has worked with pharmaceutical, biopharmaceutical and industry-affiliated firms to provide clients with fact-based analysis and business intelligence to meet challenges in a highly competitive global environment. Through innovative research techniques and advanced analytical tools, VOI’s services help clients maximize commercial opportunities. In addition to tailored advisory services, VOI produces several industry-leading reference publications including pharmahandbook: A Guide to the International Pharmaceutical Industry® and generichandbook: A Guide to the U.S. Generic Drug Industry™. For more information, visit: www.voiconsulting.com.
Shannon Torley, Media Relations 954.302.8852 x 704 firstname.lastname@example.org