The FDA and Insulin: Biologic and Biosimilar Pricing

The United States is the most expensive market for biologic drugs, including insulin, despite initiatives devised by the Food and Drug Administration (FDA) and the Affordable Care Act. For more than a decade, the biosimilars market in the US has lagged behind the European market, whose medicines are as much as 80 percent cheaper. The Biologics Price Competition and Innovation Act (BPCIA), a provision in the 2010 Affordable Care Act, authorized the FDA to create a new regulatory scheme to approve biosimilars, which are products designed to work like biologics that have already been licensed. In 2015, the FDA approved the first biosimilar, Basaglar (a type of insulin), and by 2017, there were three marketed biosimilars and two more that had been approved. The development of biosimilars is intended to increase competition among biologic manufacturers and drive down prices and making products like insulin more accessible.

Despite the BPCIA and approval of biosimilars like Basaglar, the cost of insulin has continued to skyrocket, and the FDA proposed a new classification system to address soaring prices. In December, FDA Commissioner Scott Gottlieb unveiled a plan to classify insulin as a biologic as opposed to its previous classification as a drug. In doing so, biosimilar drug makers will be enabled to develop biosimilars that can be substituted for the original biologic. Although Gottlieb’s proposal will likely not go into effect until March 2020, the new classification scheme could create competition in what is currently a limited marketplace of insulin, thus driving down the cost for the millions of Americans with diabetes.

As of now, the insulin market is dominated by three manufacturers: Sanofi, Novo Nordisk, and Eli Lilly. Due to their market dominance, these three companies have driven up the cost of insulin, which has tripled between 2002 and 2013 and doubled between 2012 and 2016. Sanofi, Novo Nordisk, and Eli Lilly have faced immense scrutiny due to the price hikes, and criticism peaked when Minnesota Attorney General Lori Swanson filed a legal salvo against the manufactures for their “deceptive” practices. With the issue of insulin pricing entering the public eye, it is clear changes must be made.

Gottlieb’s proposal, designed to implement the intent of Congress, will address pricing standards in three ways. The first step is to extend the anti-evergreening provisions, which are meant to prevent manufacturers from having exclusivity and forestalling competition, to the newly deemed biologics and biosimilars. The next step is to address patent exclusivity and to stop twelve years of exclusivity once the current terms expire. Lastly, the proposal intends to offer guidance to current manufacturers when they submit a New Drug Application for approval under the Food, Drug, & Cosmetic Act (FDCA). This guidance will offer standards for transitioning a product from the drug pathway to the biologic pathway so that it meets the requirements of the Public Health Safety Act and section 505 of the FDCA. With these changes afoot, the FDA and Congress will hopefully make strides in addressing the current high cost of insulin and allow for new biosimilar manufacturers to enter the market, thus significantly benefitting the millions of Americans with diabetes.

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Blockchain’s Promise for the Future of Healthcare

In the winter of 2017, the world was captivated by the rise and fall of Bitcoin. Every night during its historic rise, local news ran rags-to-riches stories of basement investors who had cashed out at the right time. Every day, bloggers, tech journalists, and finance journalists tried to diagnose the market and divine what portents this fluctuation may hold for the future. Even before Bitcoin hit its fever pitch in December of 2017, the national conversation focused on the technology powering it – Blockchain. Intrigued by the success of Bitcoin, industry leaders sought to understand Blockchain’s structure, potential, and capabilities. Although the Bitcoin craze eventually came to an end, the conversation over Blockchain continues and it is now positioned to make inroads into the healthcare industry.

Blockchain, in its modern form, was created in the fallout of the 2008 financial crises. It is “[a] digital record or ledger [mini database] that is structured as a series of blocks that are strung together in a chain. Each block—a digital expression of a transaction or an event—is validated by multiple computers on the internet.” Blockchain is also highly secure by distributing “blockchains” to millions of computers, creating a decentralized database.

This combined ability to both secure and share files simultaneously makes Blockchain an attractive new frontier for the healthcare industry. Large healthcare providers such as Cigna, Aetna, and Sentara Health have signed onto Blockchain pilot programs; even Apple signaled interest in Blockchain applications. In 2018, 45% of the healthcare industry experimented with Blockchain applications and 11% of the industry deployed Blockchain applications for use in business. By 2025, it is projected that 55% “of healthcare applications will have adopted Blockchain for commercial deployment.”

This growing trend of Blockchain’s presence in healthcare is due to the enormous benefits the system presents. Cognizant’s 2017 report, “Healthcare: Blockchain’s Curative Potential for Healthcare Efficiency and Quality,” identifies top benefits that healthcare organizations could gain through its implementation, such as strengthened data security and improved interoperability. As Cognizant’s report states, “Blockchain technology enhances privacy through modern public key encryption techniques, reinforces data integrity with its properties of immutability, and improves security with its decentralized data model” allowing for improved patient care through data interoperability between different care providers. Deloitte’s 2018 global Blockchain survey also identifies areas where Blockchain will provide significant value, such as disintermediation, transparency and auditability, and industry collaboration.

These advantages present solutions to long-standing problems that have plagued the industry’s ability to modernize, specifically the ability to digitize patient records into Electronic Health Records. Blockchain’s decentralized data also provides a single authoritative source for patient records resulting in lower cost for patients, better collaboration between professionals, and increased efficiency for providers. Full realization of these benefits has the potential to revolutionize and modernize the healthcare industry and drastically increase the quality of care that patients receive.

Yet Blockchain’s real world implementation highlighted some operational hurdles. The Mayor’s office of Austin, Texas undertook a project called the “MyPass Initiative” to utilize Blockchain technology to improve the city’s homeless services by replacing paper records with “electronic encrypted records that would be more reliable and secure.” The initiative aims to “consolidate the identity and vital records of each homeless person in a safe and confidential way while providing a means for service providers to access that information.” Yet the program faces difficulties such as social buy-in and a reliable way to connect a person with an identity, which can hamper full implementation and in turn preclude the complete realization of the initiative’s benefits. These challenges are not insurmountable and overcoming them will pave the way for larger implementation of Blockchain technology in fields such as healthcare.

Blockchain’s utilization in healthcare is nowhere near complete, but its capabilities and potential operational effectiveness are becoming clear to industry leaders. Its promise to improve patient care through better interoperability, heightened data security, and lower cost is a benefit that the healthcare industry has long been looking to provide to patients. With growing industry engagement with Blockchain technologies and continued innovative pilot programs, such as Austin’s MyPass Initiative, we move ever closer to realizing Blockchain’s promise for the future of healthcare.

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From Counsel to Counselor: A Brief Overview of the Legal Profession’s Relationship with Mental Health

People joke that being an attorney sucks the life out of you. And frankly, it does. There is a high mental and emotional toll on legal professionals. A 2016 survey from the American Bar Associationfound that “21-36% of lawyers qualify as problem drinkers, approximately 28 percent of lawyers are struggling with some level of depression, and approximately 19 percent are struggling with anxiety.” These rates are especially high among young lawyers in firms. A North Carolina studyreported that one in every four attorneys displayed symptoms that would indicate clinical depression, such as a loss of appetite, lethargy, insomnia, or suicidal thoughts. The percentage of legal professionals battling substance abuse is almost twice as highas the general population. The general attitude towards lawyers from both the public and the community itself is one of resignation: lawyers are workaholics, egotistical, soulless, etc. But what changes within the community can positively impact the wellbeing of legal professionals? Can improvements in the ways lawyers handle mental health shift public perception of the occupation? 

The environment inherent in the legal profession can have a lasting impact on anxiety and depression.Work in the legal profession includes time constraints, high stakes (loss of property, freedom, life), and high expectations from peers and clients. Deadlines never really end for lawyers; even when one case closes, many others open and there is always an impending due date. The perpetual threat of malpractice leaves no room for lawyers to make mistakes. The constant scrutiny, judgment, competition, and conflict-driven nature of the occupation obstruct the formation of professional relationships and camaraderie. Oftentimes these strains extend past the courthouse and into the personal lives of lawyers, such as a depletion of energy, an inability to stop worrying about the work, and the tendency to argue their point at any given moment. 

These factors are such an integral part of the profession that many of them begin to manifest even in law school. The effects of these pressures are felt by a majority of students at some point in their education. The Survey of Law Student Well-Being in the spring of 2014showed that 17% of law students experience depression, 14% experience severe anxiety, and 43% of students report binge drinking at least once in the last two weeks. These numbers are especially high among men and continue to climb with each year of law school. These statistics are staggering. They demonstrate that young professionals entering the workforce are already in the mindset that their mental health and well-being should take a backseat to their career, success, and work. 

The remedy is no quick fix; it involves community-wide changesto the culture and mentality of how to be a successful lawyer. To start, the profession must learn to acknowledge and recognize the mental health struggles facing many lawyers. Leaders should value well-being and act as role models—not only from a business perspective, but a personal one. By destigmatizing and encouraging open communication about the mental health issues faced by the community, people may start to feel comfortable asking for help when they are burned out or depressed. When firms stress billable hours as success, they encourage overtime and discourage a work-life balance, which is necessary in mental health. There are several well-being programs that can be introduced both in the firm and outside that build teamwork, camaraderie, and collegiality. For example, there is a Lawyer Assistance Program at the D.C. Bar that is free and assists those in the legal community with issues like addiction, stress, and mental health symptoms. 

The legal profession’s relationship with booze should also be reevaluated.Social events, meetings, job recruitment, and mentorship generally occur over the consumption of alcohol, even beginning as early as law school. Addiction prone lawyers may jeopardize their sobriety in order to attend networking and social events, under the pressure that these events are necessary for promotions and positive office relations. 

Lawyers are skilled in managing risk, but lawyers have repeatedly failed to recognize that their community is the one at risk. So, then, why is it so difficult for lawyers to recognize that their community is the one at risk? The current structure and culture leave no room for well-being or mental health. To ignore this problem any longer is to continue to put lawyers, clients, firms, and the profession as a whole in jeopardy.  

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Does a New Round of Pharmaceutical Deal-Making Invite Regulatory Scrutiny?

On January 3rd, Bristol-Myers Squibb Co. agreed to purchase Celgene Corp. for approximately $74 billion. Once the deal closes, it will be the largest pharmaceutical acquisition in history. The acquisition is driven by Bristol-Myers’ expansion into immuno-oncology drug manufacturing and the potential to leverage Celgene’s research pipeline to boost Bristol-Myer’s pipeline in the future. It is expected with this deal that other drug makers will begin looking at larger style acquisitions to remain competitive in the evolving drug market. Such business pickup, however, may draw increased government scrutiny, as concerns about corporate consolidation and its impact on drug pricing may push the government to intervene in some of these acquisitions.

With this acquisition, Bristol-Myers will acquire Revlimid, a drug that treats multiple myeloma. Revlimid currently accounts for a majority of Celgene’s profits, grossing approximately $5.8 billion in 2015. Although Revlimid continues to increase in sales each year, it has had to contend with a number of patent challenges. While Revlimid is set to expire in 2024 in Europe and 2027 in the United States, Celgene has agreed to allow India’s Natco Pharma Ltd. capped sales in the United States in 2022 and lifts that cap in 2026. Bristol-Myers’ acquisition of Celgene would make the new company less dependent on a single drug and would also enable Bristol-Myers to take advantage of Celgene’s immuno-oncology research. Bristol-Myers currently markets Opdivo, a drug used to treat metastatic melanoma and non-small cell lung cancer. Bristol-Myers has been working with smaller drug makers in several combination studies to expand Opdivo’s use, and the acquisition of Celgene could allow greater research opportunities.

The last five years have seen a great deal of consolidation within the pharmaceutical industry, as larger firms have been acquiring smaller firms to take advantage of certain “blockbuster” drugs these firms have created. For instance, in 2018, the French drug maker Sanofi purchased the hemophilia spinoff of Biogen Inc., Bioverativ Inc., for approximately $11 billion. With this deal, Sanofi attempted to improve its rare disease portfolio by acquiring a promising research pipeline. Larger scale acquisitions have been less popular than small scale acquisitions mostly due to Pfizer Inc.’s failure to acquire generic drug maker Allergan PLC in 2016.

In 2015, Pfizer announced a deal to merge with Allergan for approximately $160 billion. The deal would have allowed Pfizer to re-domicile for tax purposes in Ireland, commonly known as a tax inversion, and take advantage of Allergan’s generic drug pipeline to build synergies within Pfizer’s lagging production pipeline. Under the Obama Administration, the Department of the Treasury issued new guidance on structural requirements for tax inversions that were explicitly written to block the Pfizer-Allergan merger. Pfizer ultimately ended discussions with Allergan and has not made any new major acquisitions after both this, and the attempted acquisition of British drug maker AstraZeneca PLC in 2014, failed due to opposition by the British government. More recent large scale pharmaceutical consolidation has continued with primarily European firms taking the lead, such as Irish drug maker Actavis’ acquisition of Allergan in 2015 for $70.5 billion and Japan’s Takeda Pharmaceutical Co.’s acquisition of Irish drug maker Shire PLC for $62 billion in 2018.

If other pharmaceutical firms begin large scale acquisitions, as many pharmaceutical executives have spoken positively of, there is likely to be increased regulatory pressure on these deals. The Trump Administration has sought to lower the price of drugs on the market, specifically pointing to Celgene’s Revlimid, which currently costs $719.82 per dose. In 2017, Opdivo cost approximately $13,100 for a monthly dosage. There has already been some congressional scrutiny of the proposed deal, as many congressional representatives have petitioned the Federal Trade Commission and the Department of Justice to examine the acquisition, and whether the transaction will lead to higher drug prices. Neither agency has responded to the proposed deal as of yet, but either agency may intervene before the deal is expected to close later in 2019. Whether any potential antitrust concerns will be raised is still unknown as the Department of Justice declined to block CVS Health’s 2018 acquisition of the insurance company, Aetna. The government will likely look to the price increases that occur after the Celgene acquisition and whether further consolidation follows before they take a more definitive step in regulating pharmaceutical acquisitions.

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How a Government Shut-Down Impacts our Health

We rang in 2019 with a federal government shut-down. The thirty-five day shut-down commenced at midnight on December 22, 2018.  On January 25, 2019, President Trump declared the government reopened and funded until February 15, 2019. In the wake of our country’s longest federal government shut-down to date, which might not even be finished, we are forced to examine the very real consequences  for citizens during such times.

            The effects of a long-term federal government shut-down are insurmountable. The recent shut-down impacted the Food and Drug Administration (FDA) in many ways. The FDA is a crucial player when it comes to medical products, drugs, and food safety. The recent shut down certainly effected the FDA’s ability to operate wholly, and subsequently put our country’s health at risk.

            Thousands of FDA employees considered non-essential were furloughed and the FDA had to pause routine regulatory and compliance activities. For instance, during the shut-down, the FDA was unable to accept new medical product applications that required payment or to review drug applications that were not user-funded. Applications typically take several months to review. The FDA’s Center for Drug Evaluation and Research was forced to put all non-emergency over-the-counter monograph drug activities on hold because they were determined not to address immediate threats to human life and safety. More than ten drug makers were expecting  FDA decisions in March, weeks after the agency was expected to run out of money. During the shutdown, the FDA used carryover “user fee” subsidies to resume review of certain applications that required a user fee, such as New Drug Applications, Biologics License Applications, and Premarket Approval applications for medical devices if the fee had already been paid. Still, the FDA was unable to accept new user fees during the shutdown. If fee payment was required, sponsors had to postpone review until the government reopened. Some companies and industry segments, such as allergenic products, discussed  excepting user fees and chose to rely on budget authority. Thus, when budget authority lapsed, assessment for those products ceased, unless review was warranted because there was an emergency involving the safety of human life.

FDA foreign food inspections continued, almost normally, because they were considered essential. But the FDA basically had to stop inspecting domestic food production facilities during the shut-down. This means threats to the public, like bacteria outbreaks, were potentially going undetected. Much of FDA’s funding appropriated by Congress was put on hold. Therefore, decisions had to be made based on an analysis of importance and imminence. The most urgent inspections would be at facilities with prior safety issues, such as factories with listeria, salmonella contamination, or other hygienic problems. Next came foods that were more prone to contamination. For example, cheese might be a high-risk food, and a facility that manufactures crackers would be low risk, according to Scott Gottlieb, commissioner of the FDA.

Besides the logistical issues of ranking tasks by importance, he went on to explain how difficult the circumstances were for the employees. “We are trying to build accommodation in for people who have unusually difficult circumstances,” Gottlieb said.

            As we approach mid-February, time will tell how President Trump’s three-week plan went, and what is in store for the FDA and our health moving forward.

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