Prescription Drug News of Note - January 2018

Prescription Drug News of Note - January 2018

What Is a Single Source Generic and How Does It Impact Drug Pricing-115285-edited.jpg

Each month, we round up the latest FDA approvals and regulations to give you an expert take on what you need to know.

FDA Approves 46 Novel Medications in 2017

The FDA was busy in 2017 evidenced by the approval of 46 novel medications, the most in over two decades. 

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Several of these approvals were for rare diseases and certain types of cancers.  These newly approved products treat a small number of patients yet can cost hundreds of thousands of dollars and further expand the fasting growing segment of pharmacy spend, specialty pharmacy.

Several of these approved products were the result of the FDA designation of “break through therapy.”  A breakthrough therapy treats a serious or life-threatening condition and the therapy has demonstrated improvement over existing therapies.1  Breakthrough therapies are expedited through the FDA approval process.

Additional products within established non-specialty therapeutic categories were also given the nod from the FDA in 2017 including multiple entrants managing the diabetes category being approved in December.

Why is this important?
Plan sponsors and payors are going to continue the feel the burden of specialty pharmacy and can expect to see similar specialty pharmacy growth trends in 2018.  The new drug pipeline continues to have many specialty products in the queue.  New products within the diabetes therapeutic categories of SGLT-2 (Steglatro (ertugliflozin)) and GLP-1 (Ozempic (semaglutide)) mean new competition to established brands.  This new competition may impact current formulary position, coverage or rebates. 

Hospitals to Start Their Own Generic Drug Company

A group of hospitals along with consultation with the Veterans Administration (VA) have decided to create their own generic drug manufacturer.  This not-for-profit company has the backing of over 450 hospitals with potentially more on the way.  The goal will be to provide affordable generic medications to patients and stabilize the supply of generics to hospitals therefore reducing the negative clinical impact of generic drug shortages.

Many of the well-publicized problems in the U.S. generic drug market can be attributed to a reduction in the number of suppliers, consolidation of production volumes and a concentration of market pricing power. These market factors are particularly problematic with older generic medications that hospitals rely on every day to take care of desperately ill patients.

This new initiative will bring together healthcare systems from around the country to help address these generic drug market failures, providing the new not-for-profit generic drug company with plenty of customers ready and eager for its products.

Why is this important?
This is a new delivery model that could have impact on the rest of the industry.  This company already has the demand from the health care delivery organizations involved with its formation.  Not only the patients within the health care facilities but also the employees and dependents of the organizations themselves could be obtaining certain generic products from this "in-house manufacturer." There could be other companies from other industries closely monitoring the progress and success of this newly formed company with questions as to how they may be able to participate. This may signal the beginning of a different type of coalitions structure. Stay tuned.




Topics: Trends, Insights & Analysis, Enterprise Employers, Prescription Drug News & Regulations - Employers

Posted by

Ryan Haynes, R.Ph., MBA

Sr. Clinical Director, Account Management
A pharmaceutical Managed Care executive with more than 20 years of experience in healthcare delivery, Ryan provides clinical expertise to Truveris customers. Ryan’s experience includes pharmaceutical rebate contracting, creation and implementation of clinical programs to optimize plan performance, Pharmacy and Therapeutics (P&T) Committee responsibility, and direct client pharmacy benefit clinical consultation. Ryan earned his pharmacy degree from the University of Wyoming.