Patents and Regulatory Exclusivities on GLP-1 Receptor Agonists.

Importance: Glucagon-like peptide 1 (GLP-1) receptor agonists were first approved for the treatment of type 2 diabetes in 2005. Demand for these drugs has increased rapidly in recent years, as indications have expanded, but they remain expensive. Objective: To analyze how manufacturers of brand-name GLP-1 receptor agonists have used the patent and regulatory systems to extend periods of market exclusivity. Evidence Review: The annual US Food and Drug Administration's (FDA) Approved Drug Products With Therapeutic Equivalence Evaluations was used to identify GLP-1 receptor agonists approved from 2005 to 2021 and to record patents and nonpatent statutory exclusivities listed for each product. Google Patents was used to extract additional data on patents, including whether each was obtained on the delivery device or another aspect of the product. The primary outcome was the duration of expected protection from generic competition, defined as the time elapsed from FDA approval until expiration of the last-to-expire patent or regulatory exclusivity. Findings: On the 10 GLP-1 receptor agonists included in the cohort, drug manufacturers listed with the FDA a median of 19.5 patents (IQR, 9.0-25.8) per product, including a median of 17 patents (IQR, 8.3-22.8) filed before FDA approval and 1.5 (IQR, 0-2.8) filed after FDA approval. Fifty-four percent of all patents listed on GLP-1 receptor agonists were on the delivery devices rather than active ingredients. Manufacturers augmented patent protection with a median of 2 regulatory exclusivities (IQR, 0-3) obtained at approval and 1 (IQR, 0.3-4.3) added after approval. The median total duration of expected protection after FDA approval, when accounting for both preapproval and postapproval patents and regulatory exclusivities, was 18.3 years (IQR, 16.0-19.4). No generic firm has successfully challenged patents on GLP-1 receptor agonists to gain FDA approval. Conclusions and Relevance: Patent and regulatory reform is needed to ensure timely generic entry of GLP-1 receptor agonists to the market.

Applicability of European Union Competition Law to Health Care Providers: The Dividing Line between Economic and Noneconomic Activities.

Ever-increasing health spending, which, according to future projections, continues to outpace economic growth, will further endanger the financial sustainability of health systems. In a quest to improve the efficacy and efficiency of the health system and thus strengthen its financial sustainability, member states are employing market-based mechanisms to finance, manage, and provide health care. However, the introduction of elements of competition is constrained by the application of EU competition law, which raises significant concerns regarding the applicability of competition law and its limits in the field of health care. Due to the lack of a clear definition in EU legislation, the applicability and scope of competition law are determined on a case-by-case basis, which reveals an inconsistent approach by the European Commission and the CJEU regarding the application of competition law to health care providers and has created legal uncertainty. The aim of this article is to analyze relevant decisions by the commission and the CJEU case law in the pursuit of "boundaries" that may trigger the applicability of competition law with regard to health care providers. Based on the findings of the analysis, the article proposes a set of principles or guidelines for determining whether a health care provider should be considered as an undertaking and, as such, subject to EU competition law.

Market Concentration and Potential Competition in Medicare Advantage.

Issue: Medicare Advantage (MA), the private option to traditional Medicare, now serves roughly 37 percent of beneficiaries. Congress intended MA plans to achieve efficiencies in the provision of health care that lead to savings for Medicare through managed competition among private health plans. Goal: Two elements are needed for savings to accrue: a sound payment policy and effective competition among the private plans. This brief examines the latter. Methods: We use data from 2009­17 to describe market structure in MA, including the insurers offering plans and enrollment in each U.S. county. We measure both actual and potential competitors for each county for each year. Key Findings and Conclusions: MA markets are highly concentrated and have become more concentrated since 2009. From 2009­17, 70 percent or more of enrollees were in highly concentrated markets, dominated by two or three insurers. Since the payment system used to reimburse insurers selling in the MA market relies on competition to spur efficiency and premiums that more closely reflect insurers' actual costs, these developments suggest that taxpayers and beneficiaries will overpay. We also find an average of six potential entrants into MA markets, which points to a source of competition that may be activated in MA. To tap into potential competition, further research is needed to understand the factors affecting entry into MA markets.

Statutory health insurance in Germany: a health system shaped by 135 years of solidarity, self-governance, and competition.

Bismarck's Health Insurance Act of 1883 established the first social health insurance system in the world. The German statutory health insurance system was built on the defining principles of solidarity and self-governance, and these principles have remained at the core of its continuous development for 135 years. A gradual expansion of population and benefits coverage has led to what is, in 2017, universal health coverage with a generous benefits package. Self-governance was initially applied mainly to the payers (the sickness funds) but was extended in 1913 to cover relations between sickness funds and doctors, which in turn led to the right for insured individuals to freely choose their health-care providers. In 1993, the freedom to choose one's sickness fund was formally introduced, and reforms that encourage competition and a strengthened market orientation have gradually gained importance in the past 25 years; these reforms were designed and implemented to protect the principles of solidarity and self-governance. In 2004, self-governance was strengthened through the establishment of the Federal Joint Committee, a major payer-provider structure given the task of defining uniform rules for access to and distribution of health care, benefits coverage, coordination of care across sectors, quality, and efficiency. Under the oversight of the Federal Joint Committee, payer and provider associations have ensured good access to high-quality health care without substantial shortages or waiting times. Self-governance has, however, led to an oversupply of pharmaceutical products, an excess in the number of inpatient cases and hospital stays, and problems with delivering continuity of care across sectoral boundaries. The German health insurance system is not as cost-effective as in some of Germany's neighbouring countries, which, given present expenditure levels, indicates a need to improve efficiency and value for patients.

Addressing the Lack of Competition in Generic Drugs to Improve Healthcare Quality and Safety.

A lack of access to critical drugs in the USA, either due to exorbitant prices or shortages, has become a troubling norm that threatens the quality and safety of healthcare. In 2017, there were shortages of 146 commonly used drugs including electrolytes, chemotherapy, cardiovascular, and antibiotic agents. For example, there currently exists a shortage in intravenous fluids and injectable opioids (both in chronic short supply for years) that has been respectively ascribed to disruptions in pharmaceutical manufacturing by Hurricane Maria and manufacturing delays. These explanations, however, mask a more fundamental and avoidable cause: a lack of healthy competition in the generic drug market which is likely contributing to price hikes and shortages. By understanding this underlying cause, we hope to illuminate a pathway from our current state of complacency, where drug price hikes and shortages are routine, to a future state of effective action, where patients have reliable access to vital drugs. This article outlines a roadmap to influence incentives, regulations, new drug development, and ultimately stakeholder (i.e., patients, providers, and drug makers) behavior to enhance competition, with the ultimate aim of improving the quality and safety of healthcare for our patients.

Returns to scientific publications for pharmaceutical products in the United States.

Drug-specific clinical and health economic and outcomes research (HEOR) publications have amassed, but their effect on drug sales is largely unknown. We estimated the impact of publications on pharmaceutical sales in 3 markets (statins, rheumatoid arthritis, and asthma drugs) with varying generic competition. An event-study approach with fixed effects and difference-in-fixed-effects modeling was used to estimate the causal effects of drug-specific publications on subsequent quarter's drug-specific sales and volume. High-impact clinical and HEOR publications have significant positive effects on sales (mediated through price) and volume in the statin market (high generic competition). High-impact clinical publications have a significant positive effect on sales (mediated through volume) in low-generic competition market (asthma). The effects of publications in the rheumatoid arthritis market (no generic competition) on sales were null. Manufacturers' investment in clinical and HEOR publications needs to be strategic and should be anticipated and complemented by public investments in such studies.

Manufacturer Revenue on Inhalers After Expiration of Primary Patents, 2000-2021.

This study quantifies the revenue earned on all brand-name inhalers approved by the US Food and Drug Administration from 2000 to 2021 and compared earnings before and after expiration of primary patents on these products.

Insider versus outsider executive succession: The relationship to hospital efficiency.

BACKGROUND: The relationship between Chief Executive Officer (CEO) succession and hospitals' competitive performance is an area of interest for health services researchers. Of particular interest is the impact on overall strategic direction and health system performance that results from selecting a CEO from inside the firm as opposed to seeking outside leadership. Empirical work-to-date has yielded mixed results. Much of this variability has been attributed to design flaws; however, in the absence of a clear message from the evidence, the preference for hiring "outsiders" continues to grow. PURPOSE: This paper investigates on the extent to which insider CEO succession versus outsider succession impacts hospitals' competitive advantage vis-à-vis a sample of organizations that compete in the same sector. METHODS: A hospital matching protocol based on propensity scores is used to control for endogeneity and makes comparisons of productivity across organizations through the use of stochastic frontier estimation. FINDINGS: Succession negatively impacts hospitals' productivity, and firms with outsider CEO succession events closed the gap toward the competitive advantage frontier faster than comparable firms with insider successions. PRACTICE IMPLICATIONS: More research needs to be done on succession planning and its impact on CEO turnover.

The Questionable Economic Case for Value-Based Drug Pricing in Market Health Systems.

This article investigates the economic theory and interpretation of the concept of "value-based pricing" for new breakthrough drugs with no close substitutes in a context (such as the United States) in which a drug firm with market power sells its product to various buyers. The interpretation is different from that in a country that evaluates medicines for a single public health insurance plan or a set of heavily regulated plans. It is shown that there will not ordinarily be a single value-based price but rather a schedule of prices with different volumes of buyers at each price. Hence, it is incorrect to term a particular price the value-based price, or to argue that the profit-maximizing monopoly price is too high relative to some hypothesized value-based price. When effectiveness of treatment or value of health is heterogeneous, the profit-maximizing price can be higher than that associated with assumed values of quality-adjusted life-years. If the firm sets a price higher than the value-based price for a set of potential buyers, the optimal strategy of the buyers is to decline to purchase that drug. The profit-maximizing price will come closer to a unique value-based price if demand is less heterogeneous.

The Ambiguous Effect of GP Competition: The Case of Hospital Admissions.

In the theoretical literature on general practitioner (GP) behaviour, one prediction is that intensified competition induces GPs to provide more services resulting in fewer hospital admissions. This potential substitution effect has drawn political attention in countries looking for measures to reduce the growth in demand for hospital care. However, intensified competition may induce GPs to secure hospital admissions a signal to attract new patients and to keep the already enlisted ones satisfied, resulting in higher admission rates at hospitals. Using both static and dynamic panel data models, we aim to enhance the understanding of whether such relations are causal. Results based on ordinary least square (OLS) models indicate that aggregate inpatient admissions are negatively associated with intensified competition both in the full sample and for the sub-sample patients aged 45 to 69, while outpatient admissions are positively associated. Fixed-effect estimations do not confirm these results though. However, estimations of dynamic models show significant negative (positive) effects of GP competition on aggregate inpatient (outpatient) admissions in the full sample and negative effects on aggregate inpatient admissions and emergency admissions for the sub-sample. Thus, intensified GP competition may reduce inpatient hospital admissions by inducing GPs to provide more services, whereas, the alternative hypothesis seems valid for outpatient admissions. © 2016 The Authors. Health Economics Published by John Wiley & Sons, Ltd.

[Incentive for Regional Risk Selection in the German Risk Structure Compensation Scheme]. / Anreize für regionale Risikoselektion unter dem Morbiditätsorientierten Risikostrukturausgleich.

The introduction of the new law GKV-FQWG strengthens the competition between statutory health insurance. If incentives for risk selection exist, they may force a battle for cheap customers. This study aims to document and discuss incentives for regional risk selection in the German risk structure compensation scheme. Identify regional autocorrelation with Moran's l on financial parameters of the risk structure compensation schema. Incentives for regional risk selection do indeed exist. The risk structure compensation schema reduces 91% of the effect and helps to reduce risk selection. Nevertheless, a connection between regional situation and competition could be shown (correlation: 69.5%). Only the integration of regional control variables into the risk compensation eliminates regional autocorrelation. The actual risk structure compensation is leading to regional inequalities and as a consequence to risk selection and distortion in competition.

Japanese healthcare: Fostering competition and controlling costs.

Japan's universal healthcare system is relatively inexpensive, provides accessible services, and was established nearly 10 years before Canada's. Two aspects of Japan's system are particularly interesting. The first is that there is active competition for patients between a variety of hospital providers, which can be privately or publicly owned. This competition is based on service quality because prices are set centrally. The second feature is that these prices are adjusted biannually by a National Council, the Chuikyo, that includes payers (employers), providers, and third-party experts in public negotiations. This process improves transparency, reduces political stakes, and allows for appropriate fee adjustments. Recent movements in Canada toward more activity-based funding and greater management accountability are developing the capabilities of healthcare executives to embrace these ideas, if introduced in Canada. The increased autonomy afforded to providers will empower their leaders to make strategic decisions to improve the quality and efficiency of healthcare services.

Price champions controversial ACA replacement ideas to Senate.

Written responses to lawmakers' questions reveal Price wants to give states more authority and give patients more choices.

Cancer drugs in 16 European countries, Australia, and New Zealand: a cross-country price comparison study.

BACKGROUND: Cancer drugs challenge health-care systems because of their high prices. No cross-country price comparison of cancer drugs for a large number of countries has been published. We aimed to survey the prices of cancer drugs in high-income countries (Europe, Australia, and New Zealand). METHODS: Based on comparability in terms of the economic situation and of the pharmaceutical system, we surveyed official list prices per unit at ex-factory price level of 31 originator cancer drugs in 16 European countries, Australia, and New Zealand as of June, 2013. Drug price data for the European countries were provided by the Pharma Price Information (PPI) service; Australian and New Zealand drug price data were retrieved from the respective pharmaceutical schedules. FINDINGS: In Austria, Denmark, Finland, Germany, Italy, Norway, Sweden, and the UK, price information was available for all or all but one drug surveyed whereas the availability of price data was restricted for some drugs in other countries, especially in New Zealand and Portugal. The difference of a drug price between the highest priced country and the lowest priced country varied between 28% and 388%. A few drugs had lower outliers, especially Greek and UK prices, and upper outliers (particularly prices in Switzerland, Germany, and Sweden). Overall, Greek prices ranked at a low level, whereas Sweden, Switzerland, and Germany showed price data in similarly high ranges. INTERPRETATION: Our results showed variations in ex-factory prices of originator cancer drugs in the 18 surveyed countries. However, the surveyed prices do not include discounts negotiated by funding organisations because these discounts are confidential. Because pricing authorities can also only use these official undiscounted prices when they set prices through the common policy of external price referencing, they risk overpaying. Our findings provide an evidence base for policy makers to decide whether further policy measures related to drug prices are needed. FUNDING: None.

The Impact of Price-cap Regulations on Exit by Generic Pharmaceutical Firms.

BACKGROUND: In 1998, the Province of Ontario in Canada adopted price-cap "70/90" regulations whereby the first generic entrant was required to be priced at ≤70% of the associated brand-name product and subsequent generics were priced at ≤90% of the first generic price. The price-caps were further lowered to 50% in 2006 and 25% in 2010. This study assessed the impact of such price-cap regulations on exit by generic drug firms. METHODS: Formulary (2003-2012) listings of prescription drugs covered under the Ontario Drug Benefit program were used. The formulary tracks the "status" (on formulary, discontinued by manufacturer, and delisted for other reasons) for each drug. Markets were defined based on unique active ingredient and form within Ontario. Firm exit occurred when a manufacturer discontinued all its generic drugs within a market. The exit rate was defined as the number of generic firm-market exits divided by total generic firm-market follow-up years. Poisson regression was used to compare the exit rates during the 3 policy periods ("25," "50," and "70/90"). RESULTS: A total of 1126 generic manufacturers paired with 290 markets were identified. The exit rate ratio during the 25% price-cap period compared with the 70%/90% period was 2.42 (95% confidence interval, 1.56-3.77). A small manufacturer or a manufacturer in a market with ≥3 competitors or in an older market was more likely to exit. CONCLUSIONS: Lowering the price-cap level is associated with a higher incidence of generic firm exit from markets. Continuously reducing price-caps may have the unintended consequence of forcing generic firms to exit.

OSTEOPOROSIS DRUGS MARKETED IN THE UNITED STATES: GENERIC COMPETITION, PRICING STRUCTURE, AND DISPERSION AMONG PAYERS.

BACKGROUND: Despite the cost of pharmaceuticals, studies assessing prices of osteoporosis drugs are lacking. This study examined trends in prices of osteoporosis drugs in the United States in the period 1988-2014, assessed pricing structure of osteoporosis drugs, and evaluated price trends before and after generic drugs market entry. METHODS: Data were derived from the U.S. Food and Drug Administration, the RedBook, the Centers for Medicare & Medicaid Services, and the Federal Supply Schedule (FSS). Descriptive statistics and segmented linear regression analyses were performed. RESULTS: In the period 1988-2014, osteoporosis drug prices increased faster than the inflation. The average wholesale price (AWP) of generic products at market entry represented 90 percent of the AWP for the corresponding brand. Prices of brand products continued to increase after generic entry. Drug prices showed a significant variation when compared with the brand AWP. The brand wholesale acquisition cost (WAC) was typically set at 83.3 percent of the AWP. Community pharmacies acquired osteoporosis brand drugs at a median of 80.5 percent of the brand AWP. Significant reductions in brand AWP were observed for Medicare Part B (78.5 percent of the brand AWP), generic National Average Drug Acquisition Cost (33.7 percent), and FSS (22.5 percent). CONCLUSIONS: There are significant differences in the manufacturer prices, pharmacy acquisition costs and reimbursement rates of osteoporosis drugs. Pharmaceutical companies listed prices are higher than the pharmacy actual estimated acquisitions costs, and the prices used for reimbursement to providers. Generic drugs entry significantly drives down prices; still, prices of branded drugs facing generic competition continued to increase after generic market entry.

[Market Concentration in the Statutory Health Insurance of Germany since the Introduction of Free Choice of Sickness Funds]. / Marktkonzentration in der Gesetzlichen Krankenversicherung seit Einführung der freien Kassenwahl.

Background: The expansion of trust law to the German statutory health insurance (SHI) and the declining numbers of sickness funds suggest a strong concentration process in the German SHI market. The paper examines the level and development of market concentration since the introduction of the free choice of sickness funds in 1996. Data: The study is based on a dataset containing information on membership, contribution rate, openness, area of activity and legal successor for all sickness funds in the period from 1996 to 2013. Methods: Market concentration is measured by the concentration rate (cumulative market share of the largest market participants) and the Herfindahl-Hirschman index (HHI). In addition, the change in the HHI is also disaggregated into 3 factors: opening, switching and fusion of sickness funds. Results: Concentration rate and HHI decreased significantly between 1996 and 2008 due to opening of former closed sickness funds and a switching behaviour from large to small funds. The SHI Competition Enhancement Act of 2007 led to a turnaround. The reform permitted cross-type mergers and introduced a completely new system of budget allocation with the central health fund. The latter put an end to the growing membership of small funds due to adverse selection processes. As a result, market concentration in the German SHI rises. Although recent mega-mergers were uncritical for nationwide competition, the study already indicates the risk of market dominance on the regional level.

Is Every Smoker Interested in Price Promotions? An Evaluation of Price-Related Discounts by Cigarette Brands.

CONTEXT: Raising unit price is one of the most effective ways of reducing cigarette consumption. A large proportion of US adult smokers use generic brands or price discounts in response to higher prices, which may mitigate the public health impacts of raising unit price. OBJECTIVE: The main purpose of this study was to evaluate the retail price impact and the determinants of price-related discount use among US adult smokers by their most commonly used cigarette brand types. METHODS: Data from the 2009-2010 National Adult Tobacco Survey, a telephone survey of US adults 18 years or older, was used to assess price-related discount use by cigarette brands. Price-related discounts included coupons, rebates, buy 1 get 1 free, 2 for 1, or any other special promotions. Multivariate logistic regression was used to assess sociodemographic and tobacco use determinants of discount use by cigarette brands. RESULTS: Discount use was most common among premium brand users (22.1%), followed by generic (13.3%) and other brand (10.8%) users. Among premium brand users, those who smoked 10 to 20 cigarettes per day were more likely to use discounts, whereas elderly smokers, non-Hispanic blacks, those with greater annual household income, dual users of cigarettes and other combustible tobacco products, and those who had no quit intentions were less likely to do so. Among generic brand users, those who had no quit intentions and those who smoked first cigarette within 60 minutes after waking were more likely to use discounts. CONCLUSIONS: Frequent use of discounts varies between smokers of premium and generic cigarette brands. Setting a high minimum price, together with limiting the use of coupons and promotions, may uphold the effect of cigarette excise taxes to reduce smoking prevalence.