Auditing the prescription drug consumer price index in a changing marketplace.

Changes in the dynamics of prescription drug markets have raised issues regarding whether the United States Bureau of Labor Statistics' (BLS') Prescription Drug Consumer Price Index (CPI-Rx) has adequately kept up with the evolving marketplace. The CPI-Rx limits its sampling frame to retail outpatient outlets and excludes prescription pharmaceuticals dispensed in non-retail settings such as hospitals, physician/clinic outpatient facilities, and nursing homes. Thus, the CPI-Rx overlooks the increasingly important specialty pharmaceuticals dispensed in non-retail settings, whose transactions are instead captured in the overall hospital and professional services component of the medical care CPI. Specialty drugs now account for about 55% of all U.S. drug spending, double the share of a decade earlier. To the extent specialty drug price growth differs from that of traditional pharmaceuticals, the CPI-Rx could provide an inaccurate measure of overall drug price inflation. We calculate a chained Laspeyres CPI using data from the Merative™ MarketScan® Databases for the years 2010-2019 and IQVIA-designated specialty drugs and offer evidence showing that by not sampling specialty drugs in non-retail settings, the CPI-Rx has understated overall U.S. prescription drug inflation by just under 75 basis points annually. We discuss implications for health care policy and suggest the BLS examine the feasibility of publishing an overall pharmaceutical price index incorporating both traditional and specialty pharmaceuticals dispensed in retail and non-retail settings.

Evaluation of model materials for CAD/CAM in vitro studies.

AIM: Evaluation of appropriate models for computer-aided design/computer-aided manufacturing (CAD/CAM) in vitro studies by investigation of different model materials regarding suitability for intraoral scanners and dimensional stability. MATERIALS AND METHODS: A typodont model was prepared to accommodate a 10-unit prosthesis. The model was duplicated using six different materials: class IV die stone (DS), cobalt-chrome molybdenum (CoCrMo), epoxy resin (EPOX), polyurethane (PU), titanium (TI), and zirconia (ZI). An intraoral scanner was used to obtain three scans of each model. Reference datasets were generated using micro-computed tomography (micro-CT). The first scan was compared with the corresponding reference micro-CT dataset to assess its trueness. The precision was measured by comparing all scans within one test group. For the evaluation of dimensional stability, micro-CT was used to generate three-dimensional (3D) datasets of the models at different time intervals over a 6-week period. The models were kept under constant conditions during the study. All datasets were analyzed with software that determined the deviation of two datasets by alignment using a best-fit algorithm. RESULTS: The criterion of trueness was fulfilled by CoCrMo, EPOX, PU, and the typodont model. Scans of CoCrMo and ZI showed the best precision. PU and the typodont model did not meet the requirement of dimensional stability, whereas EPOX and gypsum were stable only for a period of 10 days. CONCLUSION: The CoCrMo model was the only one that met all the criteria for an appropriate model for CAD/CAM in vitro studies. The other investigated materials either lacked dimensional stability or could not be scanned accurately and reproducibly.

FOUR FACTS CONCERNING COMPETITION IN U.S. GENERIC PRESCRIPTION DRUG MARKETS.

We establish four facts concerning competition among U.S. generic drug suppliers, using IQVIA's National Sales Perspective™ 2004Q4 - 2016Q3 data. We define a unique product market ("molform"), consisting of the combination of a molecule active ingredient and a route of administration formulation, aggregated over different dosages and strengths. We find: (i) supply exhibits substantial churning in entrants and exits; (ii) volume-weighted use concentrates in older generic molform cohorts; (iii) the extent of competition is greatest for the oldest molform cohorts and is smallest for the youngest molform cohorts. With a median of one competitor, the extent of competition in the youngest molform cohort is very limited; and (iv) supplier-molform annual revenues are typically small, are largest for relatively young drugs, but are heavily right skewed. These four facts provide an empirical platform on which to construct and empirically evaluate hypotheses regarding generic drug market structure, performance, and possible policy reforms.

Characterization of annual disease progression of multiple sclerosis patients: A population-based study.

BACKGROUND: Previous research characterizing factors influencing multiple sclerosis (MS) disease progression has typically been based on time to disease milestones (Kaplan-Meier, Cox hazard regression, etc.). A limitation of these methods is the handling of the often large groups of patients not reaching the milestone. OBJECTIVE: To characterize clinical factors influencing MS disease progression as annual transitions from each Expanded Disability Status Scale (EDSS). METHOD: The annual progression of 11,964 patients from the Swedish MS Registry was analysed with 10 multinomial logistic regressions, that is, one for transition from each full EDSS with explanatory variables age, sex, age at onset, time in current EDSS, highest prior EDSS, MS course and treatment. RESULTS: All factors (except sex) investigated had statistically significant impacts on transitions from at least one EDSS. However, significance and size of the effect are dependent on the EDSS state of the patient. Greater age, longer time in a state, highest prior EDSS, having progressive MS and treatment had significant impacts, whereas age at onset had minor impact. CONCLUSION: Our study confirms that established factors associated with MS disease worsening in time to disease milestones also have impacts on annual progression. This approach adds granularity to what EDSS these factors have an influence.

Regional Variation in Physician Adoption of Antipsychotics: Impact on US Medicare Expenditures.

BACKGROUND: Regional variation in US Medicare prescription drug spending is driven by higher prescribing of costly brand-name drugs in some regions. This variation likely arises from differences in the speed of diffusion of newly-approved medications. Second-generation antipsychotics were widely adopted for treatment of severe mental illness and for several off-label uses. Rapid diffusion of new psychiatric drugs likely increases drug spending but its relationship to non-drug spending is unclear. The impact of antipsychotic diffusion on drug and medical spending is of great interest to public payers like Medicare, which finance a majority of mental health spending in the US. AIMS: We examine the association between physician adoption of new antipsychotics and antipsychotic spending and non-drug medical spending among disabled and elderly Medicare enrollees. METHODS: We linked physician-level data on antipsychotic prescribing from an all-payer dataset (IMS Health's XponentTM) to patient-level data from Medicare. Our physician sample included 16,932 US. psychiatrists and primary care providers with > 10 antipsychotic prescriptions per year from 1997-2011. We constructed a measure of physician adoption of 3 antipsychotics introduced during this period (quetiapine, ziprasidone and aripiprazole) by estimating a shared frailty model of the time to first prescription for each drug. We then assigned physicians to one of 306 U.S. hospital referral regions (HRRs) and measured the average propensity to adopt per region. Using 2010 data for a random sample of 1.6 million Medicare beneficiaries, we identified 138,680 antipsychotic users. A generalized linear model with gamma distribution and log link was used to estimate the effect of region-level adoption propensity on beneficiary-level antipsychotic spending and non-drug medical spending adjusting for patient demographic and socioeconomic characteristics, health status, eligibility category, and whether the antipsychotic was for an on- vs. off-label use. RESULTS: In our sample, mean patient age was 62 years, 42% were male, and 86% had low-income. Half of antipsychotic users in Medicare had an on-label indication. The weighted average propensity to adopt the three new antipsychotics varied four-fold across HRRs. For every one standard deviation increase in the propensity to adopt there was a 5% increase in antipsychotic spending after adjusting for covariates (adjusted ratio of spending 1.05, 95% CI 1.01-1.08, p = 0.005). Physician propensity to adopt new antipsychotics was not associated with non-drug medical spending (adjusted ratio 0.96, 95% CI 0.91-1.01, p < 0.117). DISCUSSION: These findings suggest wide regional variation in physicians' propensity to adopt new antipsychotic medications. While physician adoption of new antipsychotics was positively associated with antipsychotic expenditures, it was not associated with non-drug spending. Our analysis is limited to Medicare and may not generalize to other payers. Also, claims data do not allow for the measurement of health outcomes, which would be important to evaluate when calculating the value of rapid vs. slow technology adoption.

Antipsychotic prescribing: do conflict of interest policies make a difference?

BACKGROUND: Academic medical centers (AMCs) have increasingly adopted conflict of interest policies governing physician-industry relationships; it is unclear how policies impact prescribing. OBJECTIVES: To determine whether 9 American Association of Medical Colleges (AAMC)-recommended policies influence psychiatrists' antipsychotic prescribing and compare prescribing between academic and nonacademic psychiatrists. RESEARCH DESIGN: We measured number of prescriptions for 10 heavily promoted and 9 newly introduced/reformulated antipsychotics between 2008 and 2011 among 2464 academic psychiatrists at 101 AMCs and 11,201 nonacademic psychiatrists. We measured AMC compliance with 9 AAMC recommendations. Difference-in-difference analyses compared changes in antipsychotic prescribing between 2008 and 2011 among psychiatrists in AMCs compliant with ≥ 7/9 recommendations, those whose institutions had lesser compliance, and nonacademic psychiatrists. RESULTS: Ten centers were AAMC compliant in 2008, 30 attained compliance by 2011, and 61 were never compliant. Share of prescriptions for heavily promoted antipsychotics was stable and comparable between academic and nonacademic psychiatrists (63.0%-65.8% in 2008 and 62.7%-64.4% in 2011). Psychiatrists in AAMC-compliant centers were slightly less likely to prescribe these antipsychotics compared with those in never-compliant centers (relative odds ratio, 0.95; 95% CI, 0.94-0.97; P < 0.0001). Share of prescriptions for new/reformulated antipsychotics grew from 5.3% in 2008 to 11.1% in 2011. Psychiatrists in AAMC-compliant centers actually increased prescribing of new/reformulated antipsychotics relative to those in never-compliant centers (relative odds ratio, 1.39; 95% CI, 1.35-1.44; P < 0.0001), a relative increase of 1.1% in probability. CONCLUSIONS: Psychiatrists exposed to strict conflict of interest policies prescribed heavily promoted antipsychotics at rates similar to academic psychiatrists and nonacademic psychiatrists exposed to less strict or no policies.

The impact of emerging safety and effectiveness evidence on the use of physician-administered drugs: the case of bevacizumab for breast cancer.

BACKGROUND: Spending on physician-administered drugs is high and uses not approved by the US Food and Drug Administration (FDA) are frequent. Although these drugs may be targets of future policy efforts to rationalize use, little is known regarding how physicians respond to emerging safety and effectiveness evidence. STUDY OBJECTIVE: We analyzed changes in bevacizumab (Avastin) use for breast cancer in response to its market launch (February 2008), 2 FDA meetings reviewing data suggesting that its risks exceed its benefits (July 2010 and June 2011), and the FDA's withdrawal of approval (November 2011). DATA: Data from a population-based audit of oncologists' prescribing (IntrinsiQ Intellidose) were used to measure the monthly number of breast cancer patients treated with bevacizumab (January 2008-April 2012). METHODS: The number of bevacizumab patients following each regulatory action was estimated using negative binomial regression, compared with patients before the first FDA meeting, adjusting for cancer stage, treatment line, patient age, and outpatient office affiliation. RESULTS: Bevacizumab use for breast cancer increased significantly after FDA approval. After all regulatory actions, there was a 65% decline (95% CI, 64%-65%) in use compared with the period before the first meeting. The largest decline was in the 6-month period after the first meeting (37%; 95% CI, 28%-47%). The rate of decline did not differ by patient or cancer characteristics and differed minimally by office affiliation. DISCUSSION: Bevacizumab use for breast cancer declined dramatically after FDA meetings and regulatory actions, a period without changes in guideline recommendations or insurance coverage. Physicians seem to be responsive to emerging evidence concerning physician-administered drug safety and effectiveness.

Advance market commitment for pneumococcal vaccines: putting theory into practice.

Markets for life-saving vaccines do not often generate the most desired outcomes from a public health perspective in terms of product quantity, quality, affordability, programmatic suitability and/or sustainability for use in the lowest income countries. The perceived risks and uncertainties about sustainably funded demand from developing countries often leads to underinvestment in development and manufacturing of appropriate products. The pilot initiative Advance Market Commitment (AMC) for pneumococcal vaccines, launched in 2009, aims to remove some of these market risks by providing a legally binding forward commitment to purchase vaccines according to predetermined terms. To date, 14 countries have already introduced pneumococcal vaccines through the AMC with a further 39 countries expected to introduce before the end of 2013.This paper describes early lessons learnt on the selection of a target disease and the core design choices for the pilot AMC. It highlights the challenges faced with tailoring the AMC design to the specific supply situation of pneumococcal vaccines. It points to the difficulty - and the AMC's apparent early success - in establishing a long-term, credible commitment in a constantly changing unpredictable environment. It highlights one of the inherent challenges of the AMC: its dependence on continuous donor funding to ensure long-term purchases of products. The paper examines alternative design choices and aims to provide a starting point to inform discussions and encourage debate about the potential application of the AMC concept to other fields.

Quality Adjustment for Health Care Spending on Chronic Disease: Evidence from Diabetes Treatment, 1999­2009.

US health care expenditures reached $2.5 trillion in 2009, representing 17.6 percent of gross domestic product (GDP) and $8,086 per person (US Department of Health and Human Services Centers for Medicare and Medicaid Services 2011). Since health care represents a large and growing share of the economy, and factors such as population aging imply that chronic disease treatment will continue to expand as a share of health expenditures, developing methods for assessing the value of quality improvement for chronic disease spending is of increasing importance for accurately measuring real economic activity. This paper develops a method for assessing the value of quality changes associated with health care for patients living with one important chronic disease, diabetes mellitus, using 11 years of detailed data on spending and quality of care for over 800 patients. We first provide an overview of measurement issues for health care quality, and then present our data, methods, results, and a brief discussion.

The Price to Consumers of Generic Pharmaceuticals: Beyond the Headlines.

Generic drug prices have received a great deal of attention in the past few years. Many agencies have conducted investigations into the pricing patterns for generic drugs. Price spikes for several specific generic drugs have also been widely reported in the media. Today, 90% of all retail prescriptions sold in the United States are generic drugs. Thus, these prices affect affordability of prescription drugs. We construct two Laspeyres chained price indexes for generic prescription drugs. The first reflects direct out-of-pocket payments by consumers to pharmacies for dispensing generic prescription drugs. The second measures the total price received by the pharmacy (the direct out-of-pocket payment plus the price paid to the pharmacy by the insurer). The chained direct out-of-pocket consumer price index we construct shows a roughly 50% decline for generic prescription drugs between 2007 and 2016. The total consumer price index for generic prescription drugs fell by nearly 80%.

The geography of prescription pharmaceuticals supplied to the USA: levels, trends, and implications.

Prescription pharmaceuticals are frequently used consumer products whose manufacturing location is commonly held as a trade secret by firms and US regulatory agencies. Here we use previously non-publicly available data to describe levels and trends in the manufacturing locations of the most commonly used prescription pharmaceuticals, off-patent generic drugs, intended to be consumed by Americans. We find that the base ingredients required for the manufacturing of these prescription drugs are overwhelmingly and increasingly manufactured in non-domestic locations, specifically India and China. The manufacturing of finished prescription drugs for the American market is more equally split between domestic and foreign locations, but is increasingly foreign as well. The American reliance on non-domestic manufacturing of prescription drugs is important for stakeholders to appreciate, given current quality and pricing concerns and their potential susceptibility to interruptions in supply due to natural disasters, pandemics, and international trade negotiations. We discuss implications of these levels and trends for current domestic and international policy discussions.

Biosimilars And Follow-On Products In The United States: Adoption, Prices, And Users.

Biologic drugs account for a disproportionate share of the increase in pharmaceutical spending in the US and worldwide. Against this backdrop, many look to the expanding market for biosimilars-follow-on products to biologic drugs-as a vehicle for controlling pharmaceutical spending. This study explores the early years of entry of biosimilars and related follow-on products in the US. Using monthly sales data from the period 2005-19 for ten drug classes, we examine how quickly biosimilars/follow-on products gained market share and the subsequent trajectory of prevailing (national average invoice) prices. Our analysis suggests that although uptake has been slower than what is typically seen in generic drug markets, the most recent entrants have captured market share more rapidly than comparable earlier biosimilars/follow-on products. We also document that from biosimilar/follow-on products' time of entry, their lower prices help offset the overall trend in average annual reference-product price increases. Our findings can provide insight into future policy reforms aimed at increasing competition and use of biosimilars, leading to expanded patient access and significant cost savings.

Bridging the gap: improving clinical development and the regulatory pathways for health products for neglected diseases.

BACKGROUND: There has been tremendous progress over the last decade in the development of health products--drugs, vaccines, and diagnostics--for neglected diseases. There are now dozens of candidate products in the pipeline. PURPOSE: Our purpose is to assess challenges that will arise in later-stage clinical development of these candidate health products and propose a strategy that would help bring the costs, risks, and finances for their clinical trials into a better, more sustainable balance. METHODS: We conducted a literature review of clinical trial-related publications, interviewed individuals sponsoring and conducting interventional clinical trials for neglected diseases, and analyzed data from Clinicaltrials.gov, a clinical trials registry, on neglected disease clinical trials initiating subject recruitment between January 1, 2003 and December 31, 2009. We quantified Clinicaltrials.gov data into country-specific participation in clinical trials and aggregated them into geographic regions. We employed bioinformatics and keyword methods to classify trials by type of intervention, sponsor, study phase, and therapeutic area. RESULTS: Two substantial bottlenecks threaten our capacity to bring these candidate neglected disease therapies to those in need. First, the research and regulatory capacity in many neglected disease-endemic settings is not adequate to support the clinical trials that need to occur there in order to complete the development of these products. Second, even with expected attrition in the pipeline, current levels of financing are insufficient to support the clinical development of these products under current cost assumptions. LIMITATIONS: The proportion of trials of relevant studies not registered on Clinicaltrials.gov is not known, but is thought to be smaller post-2005, after the International Committee of Medical Journal Editors initiated a policy requiring investigators to deposit information about trial design into an accepted clinical trials registry before beginning patient enrollment. CONCLUSIONS: Realizing the promise of the neglected disease product pipeline will require not only increased funding for large-scale clinical trials and capacity building, but also greater attention to how these trials and their regulatory pathways can be improved to reduce unnecessary costs, delays, and risks to trial subjects. We propose a two-prong strategy: (1) adaptation and adoption of emerging research on 'sensible guidelines' for reducing large-scale, randomized clinical trial costs to the demands of the neglected disease product pipeline and (2) regional approaches to regulation and ethical review of clinical trials for health products for neglected diseases.

The net value of health care for patients with type 2 diabetes, 1997 to 2005.

BACKGROUND: The net economic value of increased health care spending remains unclear, especially for chronic diseases. OBJECTIVE: To assess the net value of health care for patients with type 2 diabetes. DESIGN: Economic analysis of observational cohort data. SETTING: Mayo Clinic, Rochester, Minnesota, a not-for-profit integrated health care delivery system. PATIENTS: 613 patients with type 2 diabetes. MEASUREMENTS: Changes in inflation-adjusted annual health care spending and in health status between 1997 and 2005 (with health status defined as 10-year cardiovascular risk), holding age and diabetes duration constant across the observation period ("modifiable risk"), and simulated outcomes for all diabetes complications based on the UKPDS (United Kingdom Perspective Diabetes Study) Outcomes Model. Net value was estimated as the present discounted monetary value of improved survival and avoided treatment spending for coronary heart disease minus the increase in annual spending per patient. RESULTS: Assuming that 1 life-year is worth $200,000 and accounting for changes in modifiable cardiovascular risk, the net value of changes in health care for patients with type 2 diabetes was $10,911 per patient (95% CI, -$8480 to $33,402) between 1997 and 2005, a positive dollar value that suggests the value of health care has improved despite increased spending. A second approach based on diabetes complications yielded a net value of $6931 per patient (CI, -$186,901 to $211,980). LIMITATION: The patient population was homogeneous and small, and the wide CIs of the estimates are compatible with a decrease as well as an increase in value. CONCLUSION: The economic value of improvements in health status for patients with type 2 diabetes seems to exceed or equal increases in health care spending, suggesting that those increases were worth the extra cost. However, the possibility that society is getting less value for its money could not be statistically excluded, and there is opportunity to improve the value of diabetes-related health care. PRIMARY FUNDING SOURCE: None.

Stratified medicine: strategic and economic implications of combining drugs and clinical biomarkers.

The potential to use biomarkers for identifying patients that are more likely to benefit or experience an adverse reaction in response to a given therapy, and thereby better match patients with therapies, is anticipated to have a major effect on both clinical practice and the development of new drugs and diagnostics. In this article, we consider current and emerging examples in which therapies are matched with specific patient population characteristics using clinical biomarkers - which we call stratified medicine - and discuss the implications of this approach to future product development strategies and market structures.

Biomimetic in vitro test system for evaluation of dental implant materials.

OBJECTIVES: Before application in dental practice, novel dental materials are tested in vitro and in vivo to ensure safety and functionality. However, transferability between preclinical and clinical results is often limited. To increase the predictive power of preclinical testing, a biomimetic in vitro test system that mimics the wound niche after implantation was developed. METHODS: First, predetermined implant materials were treated with human blood plasma, M2 macrophages and bone marrow stromal stem cells. Thereby, the three-dimensional wound niche was simulated. Samples were cultured for 28 days, and subsequently analyzed for metabolic activity and biomineralization. Second test level involved a cell-infiltrated bone substitute material for an osseointegration assay to measure mechanical bonding between dental material and bone. Standard and novel dental materials validated the developed test approach. RESULTS: The developed test system for dental implant materials allowed quantification of biomineralization on implant surface and assessment of the functional stability of mineralized biomaterial-tissue interface. Human blood plasma, M2 macrophages and bone marrow stromal stem cells proved to be crucial components for predictive assessment of implant materials in vitro. Biocompatibility was demonstrated for all tested materials, whereas the degree of deposited mineralized extracellular matrix and mechanical stability differed between the tested materials. Highest amount of functional biomineralization was determined to be on carbon-coated implant surface. SIGNIFICANCE: As an ethical alternative to animal testing, the established in vitro dental test system provides an economic and mid-throughput evaluation of novel dental implant materials or modifications thereof, by applying two successive readout levels: biomineralization and osseointegration.

Generic entry, reformulations and promotion of SSRIs in the US.

BACKGROUND: Previous research has shown that a manufacturer's promotional strategy for a brand name drug is typically affected by generic entry. However, little is known about how newer strategies to extend patent life, including product reformulation introduction or obtaining approval to market for additional clinical indications, influence promotion. OBJECTIVE: To examine the relationships among promotional expenditures, generic entry, reformulation entry and new indication approval. METHODS: We used quarterly data on national product-level promotional spending (including expenditures for physician detailing and direct-to-consumer advertising [DTCA], and the retail value of free samples distributed in physician offices) for selective serotonin reuptake inhibitors (SSRIs) over the period 1997-2004. We estimated econometric models of detailing, DTCA and total quarterly promotional expenditures as a function of the timing of generic entry, entry of new product formulations and US FDA approval for new clinical indications for existing medications in the SSRI class. Expenditures by pharmaceutical manufacturers for promotion of antidepressant medications was the main outcome measure. RESULTS: Over the period 1997-2004, there was considerable variation in the composition of promotional expenditures across the SSRIs. Promotional expenditures for the original brand molecule decreased dramatically when a reformulation of the molecule was introduced. Promotional spending (both total and detailing alone) for a specific molecule was generally lower after generic entry than before, although the effect of generic entry on promotional spending appears to be closely linked with the choice of product reformulation strategy pursued by the manufacturer. Detailing expenditures for Paxil were increased after the manufacturer received FDA approval to market the drug for generalized anxiety disorder (GAD), while the likelihood of DTCA outlays for the drug was not changed. In contrast, FDA approval to market Paxil and Zoloft for social anxiety disorder (SAD) did not affect the manufacturers' detailing expenditures but did result in a greater likelihood of DTCA outlays. CONCLUSION: The introduction of new product formulations appears to be a common strategy for attempting to extend market exclusivity for medications facing impending generic entry. Manufacturers who introduced a reformulation before generic entry shifted most promotion dollars from the original brand to the reformulation long before generic entry, and in some cases manufacturers appeared to target a particular promotion type for a given indication. Given the significant impact that pharmaceutical promotion has on demand for prescription drugs in the US, these findings have important implications for prescription drug spending and public health.

Industry funding of the FDA: effects of PDUFA on approval times and withdrawal rates.

The development of new therapies is a crucial component of efforts to improve healthcare. Because drug development and FDA regulatory review have historically been lengthy and costly processes, the US Congress passed a series of legislative acts, beginning in 1992, known collectively as the Prescription Drug User Fee Acts (PDUFA), which sought to expedite the FDA drug-review process. Here, we review data on drug approvals and drug-approval times, both as a whole and by therapeutic class, which demonstrate that implementation of the PDUFAs led to substantial incremental reductions in approval times beyond what would have been observed in the absence of these legislative acts. In addition, our preliminary examination of the trends in the number of new molecular entity withdrawals, frequently used as a proxy to assess the FDA's safety record, suggests that the proportion of approvals ultimately leading to safety withdrawals prior to PDUFA and during PDUFA I and II were not statistically different.

The generic drug user fee amendments: an economic perspective.

Since the vast majority of prescription drugs consumed by Americans are off patent ('generic'), their regulation and supply is of wide interest. We describe events leading up to the US Congress's 2012 passage of the Generic Drug User Fee Amendments (GDUFA I) as part of the Food and Drug Administration Safety and Innovation Act (FDASIA). Under GDUFA I, generic manufacturers agreed to pay approximately $300 million in fees each year of the five-year program. In exchange, the US Food and Drug Administration (FDA) committed to performance goals. We describe GDUFA I's FDA commitments, provisions, goals, and annual fee structure and compare it to that entailed in the authorization and implementation of GDUFA II on October 1, 2017. We explain how user fees required under GDUFA I erected barriers to entry and created scale and scope economies for incumbent manufacturers. Congress changed user fees under GDUFA II in part to lessen these incentives. In order to initiate and sustain user fees under GDUFA legislation, FDA requires the submission of self-reported data on generic manufacturers including domestic and foreign facilities. These data are public and our examination of them provides an unprecedented window into the recent organization of generic drug manufacturers supplying the US market. Our results suggest that generic drug manufacturing is increasingly concentrated and foreign. We discuss the implications of this observed market structure for GDUFA II's implementation among other outcomes.

Promotion of prescription drugs to consumers.

BACKGROUND: Spending on prescription drugs is the fastest growing component of the health care budget. There is public concern about the possibility that direct-to-consumer advertising of prescription drugs will result in inappropriate prescribing and higher costs of care. Guidelines issued in 1997 by the Food and Drug Administration (FDA) regarding advertising to consumers through electronic media are considered by some to be responsible for unleashing a flood of direct-to-consumer advertising. METHODS: Using data on spending for promotional purposes and sales of prescription drugs, we examined industrywide trends for various types of promotion. We also tracked the relation between promotional efforts and sales over time. Finally, we documented the variation in direct-to-consumer advertising among and within five therapeutic classes of drugs and compared the variation in the intensity of such advertising with variation in the intensity of promotion to health care professionals. RESULTS: Annual spending on direct-to-consumer advertising for prescription drugs tripled between 1996 and 2000, when it reached nearly $2.5 billion. Despite this increase, such advertising accounts for only 15 percent of the money spent on drug promotion and is highly concentrated on a subgroup of products. Within a therapeutic class, there is marked variation in the intensity of direct-to-consumer advertising, and the amount of such advertising for specific products fluctuates over time. The initial surge in direct-to-consumer advertising preceded the 1997 FDA guidelines that clarified the rules for electronic direct-to-consumer advertising, and thus the 1997 guidelines may not have been the most important reason for the overall increase. CONCLUSIONS: Although the use of direct-to-consumer advertising has grown disproportionately to other forms of promotion, it continues to account for a small proportion of total promotional efforts. Nevertheless, physicians must assist patients in evaluating health-related information obtained through direct advertising.