New User Fee Study Shows Approvals Have Not Kept Pace with Innovation

The Food and Drug Administration (FDA) has collected $7.67 billion in user fees from pharmaceutical companies since 1992. Despite dramatic increases to the fees each year, new drug approvals have not kept up with the number of ideas entering clinical trials, according to a new study from Avalere. User fees account for 68 percent of the FDA’s review budget for prescription drugs, and 58 percent of the review budget for generic drugs. The FDA user fee programs will expire on September 30, 2017, and reauthorization negotiations are already underway.

CMS Releases Data on Drug Spending

As a part of the agency’s effort to increase transparency and public understanding of drug costs, the Centers for Medicare and Medicaid Services (CMS) released its second annual data analysis of Medicare pharmaceutical spending. According to the data released last week, 375 drugs saw double digit increases in costs per prescription in 2014. While this data does not factor discounts and rebates into consideration, the sizable increases in costs compared to inflation come at a time when the pharmaceutical industry is facing criticism regarding rapid price hikes. The CMS data also shows a growth in opioid spending, with both an increasing number of claims for pain medication as well as increasing costs per claim. The narcotic best known as Vicodin remained the most prescribed medication in Medicare Part D drug plans in 2014. The next most prescribed drug was lisinopril, a blood pressure medication. CMS estimates that $121 billion worth of medication was prescribed as a part of the Part D program in 2014.

Upcoming Congressional Hearings and Markups

House Veterans’ Affairs Committee hearing titled “From Tumult to Transformation: The Commission on Care and the Future of the VA Healthcare System;” 10:30 a.m., 334 Cannon Bldg.; September 7

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