Axinn’s Landmon Provides an Expert Legal Opinion on HHS’ Drug Price Strategy

Can President Biden succeed in his plan to rein in the soaring cost of prescription drug medicine? A blueprint for accomplishing this drawn up by HHS calls upon many ideas that are already familiar to stakeholders in the health care sector, including drug price negotiation, restrictions on pay-for-delay agreements, drug imports from lower-cost countries, and restrictions on product exclusivities for originator biologics.

These are sure to encounter headwinds in Congress and the biopharmaceutical industry, says Chad Landmon, JD, chair of Axinn, Veltrop & Harkrider’s Intellectual Property and FDA Practice Groups, in an interview with Tony Hagen, senior editor for The Center for Biosimilars®.

Policy makers must be careful to ensure manufacturers get a healthy return on investment so as not to snuff out innovation: “We need to be careful about where we draw the line between innovation and drug affordability,” he says.

The HHS plan rests upon 3 pillars: making drug prices more affordable, stimulating competition among prescription drug makers, and fostering genuine innovation in medicines.

Lack of competition has allowed a trio of insulin makers to raise their US prices more than 1200% since the 1990s, according to the HHS plan. HHS also takes aim at “pay-for-delay” agreements between drug makers, which may extend exclusivity for originator biologics and generics, to the detriment of US health care consumers.

HHS may be able to work constructively with the FDA to accelerate drug application reviews and enable products to reach market sooner, but the Biden administration and HHS may run into difficulty when it comes to importing lower-cost drugs and negotiating drug prices, according to Landmon.

Importing drugs from a country with government-imposed price restrictions would be somewhat akin to importing price controls to a country with a free market for drug prices, and Canada, one possible source for prescription drugs, is already worried about potentially overwhelming demand from the United States, he notes.

HHS wants Medicare to negotiate drug prices “directly” with pharmaceutical companies and make those negotiated prices available to the commercial payer sector. This is an idea that may not succeed in the current political climate, Landmon says.

Also, an idea to shorten product exclusivity protections under the Biologics Price Competition and Innovation Act (BPCIA) could become a battle of some duration, given how long it took Congress to settle on the existing terms of the BPCIA, Landmon says. The FDA cannot approve a biosimilar or interchangeable biologic until 12 years have passed from the date of the reference product’s approval.