Approximately five months ago the Trump Administration’s Department of Health and Human Services (HHS) surprised stakeholders when it announced the termination of the Food and Drug Administration’s (FDA) Unapproved Drugs Initiative (UDI) to curb rising drug costs. A cheer went up among the Vizient pharmacy and advocacy teams (and our members) when the announcement was made as we have been tracking the impact of the UDI on medication cost and advocating for change for some time.
Our analysis conducted last year found that ending the program could protect the U.S. health care system from an additional $7.52 billion of cost. Since the announcement, the Biden Administration, FDA and HHS have been largely quiet on their plans for these long-used medications. A recent news story reported that an announcement may soon be expected, renewing discussion and debate about the program.
The UDI, established in FDA guidance in 2006 and 2011, aimed to get older drugs, including some molecules that have been marketed for more than 80 years, formally licensed through FDA’s current approval process.
To encourage manufacturers to seek approval, once a product was approved, FDA would take older “unapproved” versions off the market creating a period of “de facto” exclusivity plus potentially granting other exclusivities available to approved products.
This transition from multisource to sole source markets has consistently been associated with substantial price increases for an array of pharmaceuticals as diverse as oral medications like colchicine, which is used to treat gout, to injectable molecules like neostigmine and vasopressin, which are used in surgical and critical care settings.
Many of the manufacturers of these newly approved products were able to gain approval without performing new clinical trials, and instead relied on published literature, gaining market advantage for less work.
In addition to our estimates of significant drug costs associated with UDI program, it also has other unintended consequences on the supply chain and patient care.
Products that may be impacted by the UDI are in a unique position given uncertainty regarding their market status, long-standing clinical use and vulnerability to access issues upon approval. For example, published research has demonstrated that the UDI appeared to be associated with shortages and has impacted prescribing. Some of these long-used “unapproved” drugs also have been identified by the agency and Vizient as “essential medicines”, which highlights the importance of ensuring these medications remain accessible.
Vizient has carefully followed the Unapproved Drugs Initiative and consistently worked to advocate for changes to the program that would address its unintended consequences. Over the last several months we carefully considered potential solutions that could be advanced by HHS or FDA to support safe and effective use of these products. We met with HHS to discuss potential next steps and mechanisms to help close the loopholes enabled under the prior UDI framework. In addition, we shared these solutions with FDA and responded to HHS’s Request for Information.
Among Vizient’s recommendations were that the FDA enhance transparency to promote a greater understanding of these long-used “unapproved” drugs and work collaboratively with stakeholders to identify the products for which additional clinical information would be helpful to ensuring safety and effectiveness. In addition, Vizient encourages HHS and FDA to consider how these products fit in with policy efforts underway, such as those related to supply chain resiliency and COVID-19. We believe these recommended solutions would not require legislation and therefore, could be more quickly adopted by HHS and FDA.
While we are eager to learn more about FDA’s potential announcement, we know that Congressional action would be a critical step to ensuring issues associated with UDI do not re-emerge.
On April 14, drug pricing bills that aim to increase competition and narrowly restrict eligibility for drug exclusivity were sent to President Biden’s desk. In addition, as infrastructure talks occur on Capitol Hill, drug pricing legislation may be used to offset the costs of the package.
Given the potential cost savings that could be realized by reconsidering incentives and approval mechanisms for these drugs, the time may also be right to advance legislative solutions to ensure our supply chain remains safe and effective without replicating the unintended hardship of the UDI. As these discussions progress, and we eagerly wait for updates from HHS and FDA, Vizient will continue to advocate on behalf of our members to support commonsense drug pricing solutions.
About the authors:
In his role as group senior vice president of pharmacy services, Dan Kistner, PharmD, has oversight for an expanded pharmacy program that links analytics, strategic sourcing and pharmacy networks into one team, while setting the strategic direction to ensure that members maximize value by utilizing the industry’s leading GPO pharmacy program. Dan joined Vizient through the MedAssets integration and his most recent role at MedAssets was as general manager, where he leads the pharmacy group by using customer insight and data to drive value for clients and the pharmacy program. Dan began his pharmacy career as a client account executive at Express Scripts where he managed formularies and clinical analytics for large managed care plans. Dan has a diverse background in the pharmaceutical industry with experience in retail, hospital, specialty, pharmacy benefits management, supply chain management and mail order.
As senior vice president of public policy and government relations, Shoshana Krilow leads Vizient government relations, monitoring federal legislative and regulatory developments of importance to Vizient and its members. Prior to joining the company, Shoshana served as director of health and clinical affairs for the University of California, focusing on issues related to health policy and biomedical research for the UC Health system. She has also worked as a strategic advisor to health sector clients with a particular concentration on Medicare, the pharmaceutical and insurance industries, and the Affordable Care Act. Shoshana has deep legislative expertise, having spent several years on Capitol Hill, where she worked as a health policy advisor for members of the House of Representatives and the Senate. Prior to her work on Capitol Hill, she worked as an analyst, investment advisor and regional internal wholesaler for Goldman, Sachs and Co., Smith Barney and J.P. Morgan, respectively.