US budget tackles drug costs and generic competition

By Maggie Lynch

- Last updated on GMT

(Image: Getty/Muni Yogeshwaran)
(Image: Getty/Muni Yogeshwaran)

Related tags Generic drugs Generics Fda Nih Generic drug funding

The US Government released its fiscal year 2020 budget plan, which addressed affordable prescription drug costs through increased generic competition.

Within the budget’s section on the Department of Health and Human Services, the report addresses “the President’s 2020 budget”,​ which will take steps to increase access and reduce drug costs for US citizens. It additionally states that it will empower consumers.

The proposed budget is consistent with the American Patients First Blueprint​, a Trump administration plan to lower drug prices that proposes strategies for increased competition, negotiation, and incentivizing lower list prices.

“The Administration’s comprehensive drug pricing strategy addresses the problem of high drug prices, provides greater access to lifesaving medical products, and ensures that the US remains the leader in biomedical innovation,”​ the report states.

Additionally, the budget will aim to increase access to affordable generics​ by including numerous proposals to speed up the development of generics and “eliminate loopholes”​ that have allowed drug companies to use regulatory framework to “hinder competition.”

The budget would:○ Reform the current 180-day exclusivity forfeiture provision for first generics, so that first generics do not block subsequent generics from FDA approval○ Clarify the FDA’s approach in determining whether a new drug is a new chemical entity to ensure that only truly innovative new drugs receive an additional five years of exclusivity○ Enhance FDA authority to address abuse of petition process so the agency has greater flexibility to summarily deny petitions when circumstances indicate that the primary purpose of the petition is to delay FDA approval○ Enable FDA to tentatively approve a subsequent generic application, which would start the 180-day exclusivity clock, when a first to file generic application cannot be approved due to deficiencies

The 180-day exclusivity clock was mentioned in the 2019 budget proposal​ to increase generic drug competition.

After the 2019 budget was released, advocacy group The Alliance for a Stronger FDA stated, “Triggering the start of the 180 day-exclusivity period for first-to-file applicants who ‘park’ their exclusivity would speed delivery of generic drugs and provide substantial cost savings to American consumers.”

With the addition of the 180-day exclusivity clock in the 2020 budget proposal, the same could be said for generic competition going forward and will continue to support draft guidance​ published by the FDA addressing drug exclusivity.

FDA support

The budget will provide $6.1bn (€5.4bn) in total resources for the US Food and Drug Administration (FDA), $643m more than previously given in 2019. 

In 2019, the agency received $473m in funding from the budget request, at that time the advocacy group Alliance for Stronger FDA, stated that the funding was “an enormous vote of confidence.”

Funding for the FDA includes $55m to strengthen FDA’s activities to combat the US opioid crisis, $55m toward digital technology advancement and $13.5m for drug safety and efficacy studies.

Additional benefits towards pharmaceutical industry

Health research is prioritized in the budget, with $33bn set aside to advance knowledge of living systems to take on major health challenges in the US.

The National Health Institute (NIH) will be funded to continue research​ on the universal flu vaccine​. NIH will also see funding for repairs to its facilities.

Increased spending to support research and developments for childhood cancer would also be seen. The proposed budget would include increased funding and an initiative to enable researchers to learn from “every child with cancer” providing the opportunity to pinpoint the causes and cures for childhood cancer.

The budget will set aside $260m to support facility infrastructure for domestic influenza vaccine manufacturing, as well as providing support towards international pandemic preparedness.

An additional $10m will support the Center for Disease Control’s influenza activities for vaccine effectiveness, and to expand the production capacity of cell-grown vaccine candidates. 

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