THEY SAID IT!: LAWMAKERS HIGHLIGHT CRITICAL ROLE OF COMPETITION TO LOWER PRESCRIPTION DRUG PRICES IN MARKUP TO ADVANCE Q1/Q2 REFORMS

U.S. House Committee on Energy and Commerce Advances Bipartisan, Market-Based Solution to Crack Down on Anti-Competitive Tactic Used by Big Pharma to Extend Exclusivity, Keep Drug Prices High

In case you missed it, the U.S. House Committee on Energy and Commerce advanced bipartisan legislation last week that would increase transparency in generic drug applications. This bipartisan, market-based solution would reform the Q1/Q2 sameness requirements from the U.S. Food and Drug Administration (FDA) that Big Pharma abuses to extend exclusivity, promoting a more efficient and streamlined generic drug approval process. According to the nonpartisan Congressional Budget Office (CBO), this solution would deliver more than $1 billion in savings.

During the hearing, lawmakers from both sides of the aisle highlighted the importance of promoting competition and cracking down on anti-competitive tactics used by large pharmaceutical companies to extend exclusivity that keeps drug prices high.

U.S. Representative Neal Dunn (R-FL-02), Vice Chairman, U.S. House Committee on Energy and Commerce: “This amendment adds language to the bill to increase transparency in generic drug applications. This common-sense legislation will allow companies working to bring lower-cost generics to market clarity from the FDA on whether or not their drug is qualitatively and quantitatively the same as the list of drugs. What this means is that Americans and their companies can face less hurdles when they’re bringing a generic drug to market. In the United States, generic drugs make up over 90 percent of filled prescriptions. These are really common medicines. Americans use them every day. Generic medicines are safe, effective and often far cheaper than our branded counterparts. Increased access to these medications will save Americans money at the pharmacy and also promote their health and well-being.”

U.S. Representative Frank Pallone (D-NJ-06), Ranking Member, U.S. House Committee on Energy and Commerce: “We’re also considering a bill that will… [improve] regulatory certainty while also strengthening the medical product supply chain and enhancing patient access to lower cost medicines. Specifically, the bill will allow for disclosure of certain information related to drug formulations to generic drug manufacturers to bring lower-cost medications to patients more quickly.”

U.S. Representative Doris Matsui (D-CA-07): “The legislation we’re considering today will help bring therapies to market faster. It will prevent pharmaceutical companies from gaming the system. It will ensure patients can access the cutting-edge therapies that they need.”

More on Q1/Q2 Reforms

One way Big Pharma games the system to block competition from more affordable alternatives to high-priced brand name drugs is by abusing a process known as “Q1/Q2 sameness.” This refers to a requirement from the FDA that “generic drug manufacturers mimic the brand-name drug formulation for certain formulations” so that these drugs are “Qualitatively the same, or Q1,” meaning they contain the “same inactive ingredients,” and that they are also “Quantitively the same, or Q2,” in that they have “essentially the same concentration” of these ingredients.

The problem arises in the fact that brand name drug makers can assert “trade secret protection” around many of the products generic drug makers are attempting to copy, meaning generic drug manufacturers have to “essentially play a protracted guessing game with FDA,” as Association for Accessible Medicines (AAM) CEO John Murphy III put it in a June 2024 column. Murphy added, this leads to “a lot of spilled ink, wasted resources and unnecessary red tape,” and has “delayed generic competition, and in particular competition for critical complex products—a growing category of medicines that have complex active ingredients, formulations, or routes of administration—that are frequently expensive and desperately require generic competition.”

A prominent example is brand name drug maker Allergan’s dry eye drug Restasis. According to Murphy, “[i]t took FDA nine years to approve a generic version of Restasis because of asserted formulation trade secret claims by the brand-name manufacturer, Allergan. During that time, U.S. patients and payers were shelling out a lot for the extraordinarily expensive brand-name drug even though the relevant patents on Restasis had long been invalidated or expired.”

Watch the full committee markup HERE.