Tuesday, June 18, 2024

Biopharma Faces Regulatory Challenges: Importance of Expert Partnerships Amid New U.S. and EU Rules

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Biopharma manufacturers, already navigating the complex regulatory landscape in the U.S. and Europe, face an impending wave of sweeping regulations that could overwhelm the industry. To avoid this, partnering with knowledgeable regulatory consultants is crucial for innovative solutions. David Senior, Senior Vice President, Market Economics at Cencora (formerly AmerisourceBergen), emphasized the multiple challenges global manufacturers face. He noted the pressures on net revenues and pricing strategies, necessitating thorough analysis and modeling.

Introduced in 2022, the U.S. Inflation Reduction Act (IRA) allows Medicare to negotiate drug prices and rebates. The first 10 drugs under Medicare’s Part D negotiation were named in 2023, with final prices set to be available by January 1, 2026. These drugs represented $3.4 billion in out-of-pocket costs for Medicare enrollees in 2022. The Centers for Medicare & Medicaid Services plans to select an additional 15 drugs for 2027, 15 more for 2028, and 20 each year thereafter.

Biopharma Under Pressure: Negotiated Prices, Job Losses, and Innovation at Risk

Large biologics can be selected for price negotiation 11 years post-approval, with negotiated prices effective 13 years after approval. Small molecule drugs face a nine-year post-approval timeline. Proposed legislation, H.R. 4895, could further pressure biopharma manufacturers by imposing government price setting for up to 50 selected Medicare drugs starting in 2029 and expanding these prices to the commercial market.

A Vital Transformation study predicts significant job losses if this legislation is adopted, with estimates of 136,000 to 216,000 direct biopharma jobs lost and 678,000 to 1.1 million indirect jobs lost. Additionally, it forecasts 134 fewer FDA approvals for new medicines over a decade, focusing on Medicare-aged patients. Since 2021, biopharma venture capital investments have dropped 50%, and biopharma IPOs have declined by 70%.

David Senior highlighted the significant impact of the IRA, noting that legislative changes are unlikely before the 2024 elections. However, there is optimism that legislators may consider less disruptive tweaks to the IRA by 2026. He also mentioned a link between drug price inflation and the Consumer Price Index (CPI), suggesting manufacturers could maintain price increases at 4% to 5% for a while, but would face penalties if the CPI drops to 2%.


Biopharma Adapts to Evolving Regulations and Partner Expertise in Demand

Concurrent regulatory changes in the U.S. and the European Union (EU) further complicate matters for biopharma companies. The EU’s joint European Health Technology Assessment (EU HTA) legislation, effective January 2025, represents a significant shift in how new drugs and devices are introduced to European patients. This includes a joint perspective on clinical aspects of drugs, in vitro diagnostics (IVDs), and high-risk medical devices.

To expand its services in Europe, Cencora acquired PharmaLex in 2021, a global healthcare and life sciences consulting provider. PharmaLex offers strategic guidance and regulatory support throughout the development and commercialization process. Tommy Bramley, Senior Vice President, Market Access and Healthcare Consulting for Cencora, stressed the importance of regulatory consulting expertise and innovative solutions to help pharma and biotech partners navigate new regulatory challenges and bring innovative therapies to patients.

Monitoring legislative and industry developments on a global scale is crucial for the biopharma industry and its partners. They must continually evaluate and plan for regulatory changes, taking a proactive approach to manage the regulatory environment effectively.

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Resource: Fierce Pharma, June 03, 2024

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