Friday, May 4, 2007

Senate Debates Reducing Prescription Drug Profits

"Talk about poison-pill amendments..." The Hill.com

According to reports in The Hill, the Medical Device User Fee Act and the Prescription Drug User Fee Act, PDUFA, both of which will expire on September 30th, have come up for review in the Senate, thereby giving lawmakers an opportunity to propose a number of amendments to those laws. Both statutes involve programs under which the pharmaceutical and biotechnology industry pays certain "user fees" to the Food and Drug Administration, FDA, which, in exchange, agrees to use Congressionally defined performance standards intended to reduce the approval time for new drug applications and biological license applications.

Pharmacy and Drugs published a detailed list of the proposed amendments, some of which include permitting the importation of less costly medicines from abroad and giving the FDA authority to approve generic versions of complex biological drugs. These "measures are anathema" to the brand-name drug industry, but would be great for reducing the price of prescription drugs for health plans, public and private, as well as for individuals.

The noted proposed amendments are a verbal step in the right direction, but would cause more problems if enacted. The imported drugs would have to be FDA-approved, manufactured in facilities inspected by the FDA and carry documentation about the chain of custody of the drugs. Increasing the FDA's regulatory authority and enforcement of the new provisions would require the creation of another expensive bureaucracy which is not necessary, if all Congress wants is to allow consumers and commercial distributors to buy prescription drugs from Canada, Japan or elsewhere.

The cost factor makes it unlikely this proposal will become law, so what was the point of presenting it? To provide a distraction: under a reauthorized PDUFA, pharmaceutical companies would pay the FDA about $393 million in user fees in fiscal year 2008, compared with $305 million in FY 2007...

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