This week we look at how changes to accelerated approvals at the U.S. Food and Drug Administration (FDA) are affecting the number of drugs being approved. Also this week, there is news of CVS’s brief foray into clinical trials, the end of the public health emergency for COVID-19, and the costs of the Supreme Court not hearing a case involving generic drugs. Finally, we look at a U.S. lawsuit seeking to block a major pharma acquisition.
Each week we highlight five things affecting the life sciences industry. Here are the latest.
Accelerated drug approvals decline
The FDA has significantly restricted the use of the accelerated approval pathway, resulting in a sharp decline in the proportion of novel drugs entering the market through this route. Last year, only 12% of new drugs received accelerated approval, compared to higher rates in previous years. The FDA’s heavy reliance on this pathway, particularly in the cancer field, had boosted its annual approval numbers, but with its dwindling use, the FDA’s output is expected to be affected.
CVS Health ends clinical trial business
CVS Health is ending its clinical trials business, a move the company said was aimed at aligning its portfolio with its long-term strategic priorities. While the exact number of affected employees is unclear, the health care company and owner of the CVS drugstore chain intends to coordinate the wind-down with trial sponsors and explore opportunities to reassign affected employees within the company. The trials unit was introduced during the pandemic to improve the contract research model, but it never became a major line of business for CVS.
End of the public health emergency
In late January 2020, the federal government declared a public health emergency because of the emergence of a new coronavirus. Now, more than three years later, many regulatory flexibilities enacted during the pandemic have expired. The end of the public health emergency affects various aspects of healthcare, including telehealth, provider funding, facility changes, testing and vaccines, as well as payer responsibilities. While some flexibilities have been extended or made permanent, uncertainties and ongoing efforts to align telehealth regulations and manage Medicaid redeterminations remain. The end of the public health emergency also raises questions about the future of telemedicine and the potential impact on patient care and access to services.
Supreme Court avoids generic drug case
The Supreme Court has declined to review a lower court decision that could have significant implications for the generic drug industry. The decision revolves around the practice of “skinny labeling,” which occurs when generic drugs are brought to market by excluding certain indications still under patent protection. The Supreme Court’s refusal to hear the case raises concerns about the future of skinny labels in the industry, potentially limiting competition and cost savings. But some experts believe that the unique circumstances of this case make it unlikely to have a broad impact on the generic drug industry as a whole.
FTC sues to block Amgen’s acquisition of Horizon Therapeutics
The Federal Trade Commission (FTC) sued to block Amgen’s $27.8 billion acquisition of Horizon Therapeutics. The FTC argued that the proposed deal would stifle drug competition in the pharmaceutical industry. The FTC specifically noted that the deal would allow Amgen to offer rebates on its existing drugs to pressure insurers and pharmacy benefit managers into favoring Horizon products, a practice known as “cross-market bundling.” Both Amgen and Horizon said in separate statements that they believe they will be able to complete the deal this year after responding to the lawsuit in court.
For more insights, read RSM’s outlook for the health care industry.