The PDUFA grants pharmaceutical, medical-device and biotech companies a relatively speedy review process for their products, in return for user fees to the US Food and Drug Administration (FDA). The agreement has cut review times in half, but the deal expires in September this year. If reauthorized, the act would generate about US$720 million in the 2013 fiscal year, according to the Congressional Budget Office. Without these funds, the FDA would need to lay off as many as 4,000 employees, said Senator Mike Enzi (Republican–Wyoming) at the proceedings today. “The pipeline for drugs would come to a grinding halt.”
Senate majority leader Harry Reid (Democrat–Nevada) has repeatedly begged Congress to pass the legislation swiftly, so that patients can get the lifesaving drugs they need.
If the Senate passes their version of the PDUFA, along with any adopted amendments, the bill would be combined with a similar one from the House of Representatives. The Senate and House would then vote on the amalgamated act, and if they approve it, President Obama would then sign it into law.
The amendments presented to the Senate pertain to hydrocodone, genetically engineered salmon sunscreen testing and more. One amendment sure to cause conflict between industry and consumer-protection lobbyists (if adopted this week) focuses on pharmaceutical fraud. Amendment ‘Sanders #2109’, from Senator Bernie Sanders (Independent–Vermont), calls for a stricter penalty on companies that illegally market a medication or inflate a drug’s price in bills to Medicare or Medicaid. If convicted of these crimes, a company would lose its exclusive rights over the drug.
“This would send a strong and clear message to the drug industry,” said Sanders in his Senate address today. “Illegal behaviour would not be rewarded with continued government-granted monopolies,” he said. Companies now face fines when convicted of illegal marketing, but Sanders argues that the penalties don’t deter companies from risky behaviour. “Every major company has either been found guilty of, or settled charges of significant fraud over the last ten years,” he says. “Is fraud the business model of the pharmaceutical industry?”
It may well be part of the model. Since 2010, the pharmaceutical industry has paid more fines for fraud than any other sector, surpassing defence contractors. Last year, that totaled $1.8 billion, and it’s projected to amount to $8 billion–9 billion this year, said Sanders. Fines may seem hefty, but they pale in comparison to annual profits, he said. Indeed, the top 12 pharmaceutical companies earned a total of $44.6 billion back in 2010.
Some major consumer organizations endorse the Sanders amendment. “The amendment provides a deterrent to prevent pharmaceutical companies from engaging in fraudulent activities in the first place,” says Sammy Almashat, a health researcher at Public Citizen, a non-profit in Washington DC that published a 2010 report on pharmaceutical industry fraud and supports the amendment. “Given the fact that this activity is profitable, the bad actors have a way of forcing good actors to follow suit, so this would level the playing field,” he says.
Almashat stresses that the amendment would not punish companies when a rogue employee runs a misleading ad, for example, and that it would not apply to companies found guilty long after their drug has been pulled from the market — as in the case of the painkiller Vioxx.
The amendment would have hurt the pharmaceutical giant Eli Lilly, had it been enforced in 2009 when the company pleaded guilty for promoting the antipsychotic drug Zyprexa as a treatment for dementia, even though the FDA had not verified that Zyprexa was safe and effective for these patients. Despite $1.4 billion in criminal and civil fines, Eli Lilly continued to benefit from nearly three more years of Zyprexa exclusivity. Between 2009 and 2011, Almashat says Zyprexa sales totalled $6.1 billion.
Update 24 May
At 3pm, the Senate voted against approval for the Sanders amendment. Earlier in the day, Jon Kyl (R-Arizona) called the amendment unnecessary, and said it would disincentivize innovation because companies would no longer have the financial security that exclusivity offers after they pay millions to bring a drug through the pipeline. Enzi echoed his sentiments, and added that in the case of fraud, the amendment “discourages any settlement agreements, people would fight to the death if they knew they would lose their exclusivity.” He concluded, “We need to combat healthcare fraud, but this amendment goes too far.”
Twenty minutes later, the Senate voted 96 to 1 in favor of reauthorizing PDUFA. Sanders was the 1 ‘nay’.