Transcript Hogan and Hartson B Roberts Medicare reimbursement for

Colorado Bioscience Association
Getting Paid: Medicare Reimbursement for
Devices, Drugs and Biologicals
Beth Roberts
Partner
Hogan and Hartson
(202) 637-8626
[email protected]
Jeff Bass
Director, Government Affairs
Amgen, Inc.
(805) 447-4216
[email protected]
July 8, 2008
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© Hogan & Hartson LLP. All rights reserved.
Why Is Reimbursement
Important?
•
Providers are unlikely to buy technologies that are not reimbursed
•
Investors request reimbursement strategies and timelines
•
Reimbursement is not automatic upon Food and Drug
Administration (FDA) approval
•
Reimbursement strategies can be employed early to facilitate
coverage and reimbursement upon FDA approval
•
Increasing health care costs are driving reforms and decreasing
reimbursement rates
•
Reimbursement landscape is constantly changing
•
Private payers look to Medicare for coverage and payment of new
technologies
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FDA and CMS – Two Agencies
with Two Distinct Missions
Food and Drug Administration (FDA)
Centers for Medicare & Medicaid
Services (CMS)
“Safe and Effective”
•
Mission is to promote and protect the
public health by helping safe and
effective products reach the market in a
timely way
•
Monitors products for continued safety
after they are approved for marketing
•
Provides the public with accurate,
science-based information needed to
improve health
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“Reasonable and Necessary”
•
Mission is to ensure healthcare security
for beneficiaries
•
Administers the Medicare program and
develops coverage and reimbursement
policies
•
Works in partnership with States to
administer the Medicaid program and the
State Children’s Health Insurance
Program (SCHIP)
•
Shifting from a passive payer to an active
purchaser of high-value health care
services
Medicare
•A
federal program established in 1965 to provide
health insurance coverage to the aged, disabled,
and those with end-stage renal disease
• Title
XVIII of the Social Security Act
• According
to Kaiser Family Foundation, Medicare
covers approximately 44.2 million Americans as
of January 2008.
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Medicaid
•A
joint federal-state program providing health
care coverage for certain groups of low-income
individuals and families
• Title
XIX of the Social Security Act
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Private Payers
• Over
1000 private health insurance companies
• Cover
approximately 250 million Americans, 67.9% of
the U.S. population, according to the U.S. Census
Bureau
• Most
Americans with private insurance receive
coverage through their employers
• HMOs
and PPOs are most common types of plans
• Covered
benefits vary, but many follow Medicare’s
lead for coverage and reimbursement
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Medicare Part A
• Hospital
insurance benefits for the aged and
disabled
• Generally
covers inpatient hospital care,
short-term skilled nursing facility care, postinstitutional home health care, hospice care
• Automatic
coverage for most Americans over
age 65; available to others who are eligible
upon payment of premium
• In
2006, covered 42.9 million aged and
disabled
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Medicare Part B
• Voluntary
supplemental medical benefits
• Services
covered include physician services,
hospital outpatient and ambulatory surgery
center services, diagnostic tests, and durable
medical equipment (DME)
• Eligibility
generally extended to all persons
eligible for Part A
• In
2006, covered 40.3 million aged and disabled
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Medicare Part C
• Medicare
Advantage: optional, alternative
Medicare coverage through private plans that
contract with the federal government
• Plans
must provide at least the current
Medicare benefits package (excluding hospice)
and may provide additional services
• In
2006, 6.1 million beneficiaries chose
Medicare Advantage plans
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Medicare Part D
• Voluntary
relatively new prescription drug benefit
• Generally
covers prescription drugs not covered
under Medicare Parts A or B
• Effective
1/1/06
• Patients
enroll in private stand-alone prescription
drug plans or Medicare Advantage plans that
have a drug benefit
• In
2006, more than 27.9 million enrolled;
currently more than 39 million
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ym
rag
ve
Pa
Will there be any
payment at all?
Co
How much will be
reimbursed?
en
t
Three Independent Issues
e
Codiing
Cod ng
How will it be
billed?
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Coding
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Coding
• Standardized
coding systems are used so health
care practitioners can reflect the items and
services they provide on the claim form
• Accurate
coding is crucial for processing claims
and getting paid
• Existence
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of a code is not a guarantee of payment
Types of Codes
• Healthcare
Common Procedure Coding System
(HCPCS) codes
– Current
Procedural Terminology (CPT) codes - Level I
– Alpha-numeric
codes – Level II
Classification of Disease, 9th Revision,
Clinical Modification (ICD-9) codes
• International
– Diagnoses
– Procedures
• National
Drug Codes (NDCs)
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CPT Codes
•
Five digit codes to identify medical services and
procedures
–
Category I codes are the gold standard (#####)
–
Category III codes (####T) are easier to obtain and are published
more quickly but often are viewed as investigational by payers
•
Used by physicians, non-physician practitioners, and
hospital outpatient departments to bill Medicare
•
Recognized by most payers
•
Copyright of the American Medical Association (AMA)
•
Published annually in October to be effective January 1
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Obtaining a New CPT Code
•
Not for the faint of heart
•
Application submitted in early November for a code effective
January 1 of the second subsequent year (i.e., 14 months later)
•
A very political process driven largely by physician specialty
societies
•
Must have US peer reviewed journal articles and widespread
use
•
Miscellaneous codes can be used to bill until a unique code is
obtained
•
More information available at:
http://www.ama-assn.org/ama/pub/category/3113.html
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Alpha-Numeric HCPCS
digit codes – the first digit is a letter and the
remaining four are numbers (J-####)
• Five
• Used
to identify products, supplies, and services
not included in CPT codes, including drugs and
biologicals
• Can
be used by physicians and hospital
outpatient departments to bill Medicare
• Established
• Other
by CMS
payers may use
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Drug and Device HCPCS
•
Permanent national drug codes – established annually, usually start
with letter “J”
•
Temporary national codes – can be established quarterly, start with
letter “Q”
•
Generally, biologicals and drugs not rated as pharmaceutically
equivalent and bioequivalent in the FDA’s Orange Book will be
placed in their own unique code unless they were in the same
HCPCS code as of October 1, 2003
•
Temporary codes assigned for outpatient purposes for drugs and
devices – created quarterly, start with “C” (meant to exist for 2-3
years)
•
Codes for DME, prosthetics, and orthotics – start with “K” and “L”
•
Miscellaneous codes – not product specific
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HCPCS Coding Process
•
Submit application by early January for a code effective
on the next January 1
•
Generally item or service must be approved by FDA with 3
months of marketing data; however, FDA approval can be
submitted by March 31 for drugs and biologicals only
•
Applications discussed in public meeting
•
New codes announced in October/November effective
upcoming year
•
Additional information available at:
http://www.cms.hhs.gov/medhcpcsgeninfo/01_overview.asp
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National Drug Codes (NDCs)
•
11 digit, 3 segment code issued by the FDA upon
approval
•
First segment (labeler code) identifies manufacturer or
repackager – 5 digits
• Second
segment (product code) identifies strength,
dosage form, and formulation – 4 digits
•
Third segment (package code) identifies package size –
2 digits
•
Important for establishing payment and paying rebates
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ICD-9 Codes
•
Diagnosis codes (###.##) – used on all claims, with impact
more on coverage (i.e., identifying off-label uses) than
payment
•
Procedure codes (##.##) – used for inpatient hospital
services; often determines the applicable Medicare
severity diagnosis-related group (MS-DRG) for inpatient
reimbursement
•
Codes issued by ICD-9 Coordination and Maintenance
Committee that meets 2 times per year
•
New codes effective October 1 and April 1
•
More information available at:
http://www.cms.hhs.gov/ICD9ProviderDiagnosticCodes/02
_newrevisedcodes.asp#TopOfPage
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Coding Take-Aways
•
Although codes do not mean coverage, unique codes are
critical for technology uptake
•
Physicians often are frustrated by miscellaneous codes
requiring manual submission
•
Deadlines are crucial when filing for new codes,
particularly because of the long timeline
•
Using an existing code is faster but will have significant
reimbursement implications
•
Quantity used in coding descriptor important
•
If CPT code is necessary, start the political process early
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Coverage
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To Obtain Medicare Coverage
• Must
fall within a Medicare benefit category
• Must
be “reasonable and necessary for the
diagnosis or treatment of illness or injury or to
improve the functioning of a malformed body
member.” (Social Security Act §1862(a)(1))
• Must
not be excluded by the statute (e.g.,
eyeglasses)
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Benefit Categories
•
Most devices covered as part of
an inpatient or outpatient hospital
procedure
•
Other devices covered as DME,
prosthetics, or orthotics
•
Drugs and biologicals
-
“incident to” drugs
-
Specific categories of selfadministered drugs, including
blood clotting factors,
immunosuppressive drugs,
certain vaccines and oral cancer
and anti-emetic drugs
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“Incident to” Drugs
•
Most frequent Part B benefit category for drugs and
biologicals
•
Very specific requirements to meet
– Physician
incurs cost of drug
– Administered
in physician’s office under physician
supervision
– Drug
is not usually self-administered by the patient
– Must
meet all other coverage criteria too
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Reasonable and Necessary
•
•
Existence of a benefit category is not an assurance of coverage; item
or service must also be reasonable and necessary
–
For drugs, historically, on label use has been found to be reasonable and
necessary, but now being questioned
–
Statute provides for coverage of off-label use of approved drug in
anticancer chemotherapeutic regimen under certain circumstances
–
Devices confront coverage issues even when used on label
Clinical literature is critical
–
Preference is for peer-reviewed medical literature showing benefit
–
Need to think about clinical literature early
–
Important to include Medicare beneficiaries in studies
•
Medicare covers some investigational devices when specific
requirements are met
•
Assessment can be made nationally or by local contractors
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Who Decides?
•
National Coverage Decisions (NCDs) – 18-24 per year for all
services; Traditionally rare for drugs, but now more common
•
Local Contractors – Decisions made though local coverage
decisions (LCDs) or daily claims adjudication
National
10%
Local
National
Local
90%
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Coverage Take-Aways
•
Coverage is critical for a product’s success
• Generally,
on-label uses are covered and off-label uses
are left to carrier discretion
•
Compendia listings are important for drugs and biologicals
used in an anticancer chemotherapeutic regimen
•
Monitor LCDs and NCDs
•
Critical to have strong clinical evidence that includes
Medicare beneficiaries
•
New developments such as coverage with evidence
development, clinical trial coverage, drug safety monitoring,
and off-label coverage also should be monitored closely
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Reimbursement
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Varies By Setting
For Example:
• Part A - Hospital inpatient – Medicare Severity DiagnosisRelated Groups (MS-DRG)
• Part B - Physician office – Physician Fee Schedule;
Average Sales Price (ASP) or vendor negotiated rates
(CAP) for drugs
• Part B - Hospital outpatient – Ambulatory Payment
Classifications (APC); ASP for drugs
• Part B – Ambulatory Surgical Center (ASC) – Phase-in of
ASC Payment System based on APCs at 65% of OPPS
rate; ASP for drugs
• Part D – Self-administered drugs – plan negotiated rates
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Part A – Hospital Inpatient
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Inpatient Prospective Payment
System
•
Since 1983, most hospitals paid under a prospective
payment system (IPPS), with payment driven by the
assigned Medicare severity diagnosis related group (MSDRG)
•
Billing is for technical component; physicians bill
separately for their professional services
•
IPPS pays only for operating costs; separate prospective
system for capital costs
•
Some hospitals are excluded from IPPS
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IPPS
•
Based on ICD-9 procedure codes and diagnosis codes
submitted on bill, CMS software assigns discharge to a
MS-DRG
•
Hospital reimbursed for one MS-DRG per patient stay
regardless of resources actually used
•
Set payment for each MS-DRG adjusted by hospital
wage index
•
Separate adjustments for disproportionate share
hospitals and indirect medical education costs
• Outlier
•
payments available
Separate payments for bad debts
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Payment for Drugs and Devices
Incorporated into MS-DRG payments with
two exceptions:
1. Blood clotting factor for patients with
hemophilia; and,
2. Technologies eligible for new technology
add-on payments
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New Tech Add-on Criteria
•
Must represent “an advance that substantially improves,
relative to technologies previously available, the diagnosis
or treatment of Medicare beneficiaries”
•
Must be “new” – within 2-3 years after the point at which
data begin to become available reflecting the ICD-9 code
assigned to the technology
•
The current MS-DRG rate must be inadequate –
Thresholds are high, typically several times the MS-DRG
payment amount
•
More information available at:
http://www.cms.hhs.gov/acuteinpatientpps/08_newtech.asp
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New Tech Add-on Payment
• Made
on a case-by-case basis, however rarely
occurs
• Payment
is lesser of 50% of the estimated cost
of the new technology or 50% of the difference
between the cost of the case and the standard
MS-DRG payment
• No
payment is made for a case in which costs
do not exceed the MS-DRG rate
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IPPS Take-Aways
• Generally,
IPPS is a tough setting to obtain
additional drug and device reimbursement
• Drug
therapies and devices that decrease
length of stay or reduce inpatient expenditures
are an easier sell
• The
adoption of MS-DRGs may create more
opportunities for the reclassification of new
technologies
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Part B – Physician Office
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Physician Office
• Bill
using Current Procedural Terminology (CPT)
and Healthcare Common Procedure Coding
System (HCPCS) codes for the items and
services they furnish
– CPT
codes for office visit or procedures performed
– HCPCS
• Use
codes for drugs administered
ICD-9 diagnosis codes to reflect patient
condition
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Payment for Physician Services
•
Made under the Medicare Physician Fee Schedule
•
Payment rates generally are calculated by adding the following three
relative “weights” and multiplying the sum by a conversion factor:
(1) physician work
(2) practice expenses
(3) malpractice expenses
•
Each of these three relative weight categories also is adjusted for
payment in facility and non-facility settings and to reflect variations in
local geographic markets
•
The American Medical Association collects data from its members and
other specialty societies to establish the values for each of the above
inputs; CMS accepts or rejects
•
Flaw in conversion factor update mechanism causes substantial cuts
each year unless Congress acts
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2008 Drug Payment
•
Most drugs administered “incident to” are paid at 106% of
ASP
•
Physicians choose to buy drugs and be reimbursed based
on ASP or to participate in the Competitive Acquisition
Program (CAP)
•
Exceptions:
–
Blood and blood products, but not clotting factor (paid in the same
way as on October 1, 2003)
–
Certain vaccines
–
Infusion drugs furnished through durable medical equipment
(DME)
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Average Sales Price (ASP)
• ASP
is defined as total commercial sales divided
by total units sold in a quarter, net of all
discounts and price concessions
– Manufacturers
– CMS
report using 11-digit NDCs
computes rates by HCPCS code
• Nominal
sales and sales exempt from best price
calculations are excluded
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ASP Reporting
• ASP
is reported by manufacturers on a quarterly
basis, 30 days after end of quarter
• First
reporting was for 1Q 2004, due April 30,
2004
quarter lag – e.g., 1Q 2008 rates based on
3Q 2007 ASP submissions
• One
• The
Secretary may reduce a drug’s payment rate
to lesser of widely available market price
(WAMP) or 103% of the average manufacturer
price (AMP) if ASP exceeds WAMP or AMP by
5%
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ASP Determined Rates
• Multiple
source: 106% of volume weighted ASPs
of all NDCs within HCPCS code
• Single
source: 106% of the lesser of ASP (as for
multiple source drug) or WAC
• Minimal
difference for single vs. multiple source
because ASP should be lower than WAC
• WAC
used for new products for two quarters (no
ASP figures to report)
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Wholesale Acquisition Cost
•A
price published in national drug pricing
compendia issued by private companies such as
First Databank and Medi-Span
• Now
statutorily defined as the manufacturer’s list
price for the drug to wholesalers or direct
purchasers in the United States, not including
prompt pay or other discounts, rebates, or
reductions in price, as reported in wholesale
price guides or other publications of drug pricing
data
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Competitive Acquisition Program
•
Created by the MMA, CAP offers physicians an alternate
method of acquiring certain drugs for Medicare beneficiaries
•
Beginning in late 2006, physicians have choice of current
“buy and bill” method or obtaining drugs from the CAP
vendor.
•
CAP also may help reduce Medicare spending on drugs
provided in physicians’ offices through competitive bidding
•
Only one vendor and approximately 3000 physicians
enrolled
•
CAP contract expires at end of this year; CMS in process of
soliciting new bids
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Part B – Hospital Outpatient
Department (HOPD)
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Hospital Outpatient
Reimbursement
Outpatient Prospective Payment System (OPPS) went
into effect on August 1, 2000
–
Set payment for certain items or services, identified by CMS by
HCPCS code
–
Payable codes assigned to Ambulatory Payment Classifications
(APC)
–
Median cost data used to set rates for APCs
–
Multiple APCs may be paid
–
Annual rulemaking process
–
Physicians bill separately for their professional services
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OPPS Drug Payment in 2008
•
105% of ASP (104% of ASP proposed for 2009)
•
New drugs paid at 95% of Average Wholesale Price
(AWP) until a code is assigned
•
Pass-through drugs paid at 106% of ASP or CAP rate
•
Influenza, pneumococcal pneumonia, and Hepatitis B
vaccines paid based on reasonable cost
•
Drugs less than $60 per day, contrast agents, and
diagnostic radiopharmaceuticals currently are packaged.
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Device Payment Under OPPS
•
Most are reimbursed as part of the service or procedure
(e.g., pacemaker reimbursed through payment for
procedure implanting pacemaker)
•
Device pass-through payments present an opportunity for
separate payment for new devices
•
New technology APCs create an opportunity for separate
payment for a new procedure, including the cost of the
new device
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Device Pass-Through
•
Criteria
–
Must be FDA approved (IDE counts)
–
Single use and integral part of a procedure
–
Come in contact with human tissue
–
Surgically implanted or inserted
–
Substantial clinical improvement – substantially improve diagnosis or treatment
of illness or injury
–
Meet cost requirements
•
Done on a category basis
•
Hospitals paid charges for device adjusted to cost
•
Status lasts for two to three years and then payment included in payment for
procedure
•
Applications reviewed quarterly and available at:
http://www.cms.hhs.gov/HospitalOutpatientPPS/Downloads/catapp.pdf
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New Technology APC
•
Reserved for comprehensive service or procedure that is “truly new” and
that has not been adequately represented in the claims data
•
“Truly new” means the inability to describe appropriately, and without
redundancy, the complete service with a current individual HCPCS code
or combination of codes
•
New Technology APCs are defined solely on the basis of cost and not
the clinical characteristics of a service
•
The payment rate for each New Technology APC is based on the
midpoint of a range of costs, not on a relative payment weight
•
Status lasts for two to three years until adequate data are available to
place the procedure in a permanent APC
•
Applications reviewed quarterly and available at:
http://www.cms.hhs.gov/HospitalOutpatientPPS/Downloads/newtechapc.pdf
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Part D – Prescription Drug Benefit
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Part D Overview
•
The Part D drug benefit is a voluntary benefit
•
Available to individuals entitled to Medicare Part A, enrolled in
Part B, or both
•
Administered through private entities (Part D plans)
•
Enrollment
–
Annual election period is November 15-December 31
•
Premium penalty for late enrollment unless have creditable
coverage
•
Manufacturers negotiate payment rates with plans, and
pharmacies bill using NDCs
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Basic Part D Benefit Package
2006-2009
5%
Total Spending
“Donut Hole” in Coverage
2006- $2850.00
2007- $3051.25
2008- $3216.25
2009- $3453.75
2006- $5100.00
2007- $5451.25
2008- $5726.25
2009- $6153.75
75% of drug costs are
covered.
2006- $251- $2250
2007- $266- $2400
2008- $276- $2510
2009- $296- $2700
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95% Coverage After Out of Pocket
2006- $3,600
2007- $3,850
2008- $4,050
2009- $4,350
25%
copay
75% coverage
Deductible
2006- $250
2007-$265
2008-$275
2009-$295
Coverage of Part D Drug
•
Statute exempts coverage for certain types of drugs
•
Even if not excluded by the statute, not all Part D drugs
are covered by a plan
•
Plans have discretion to establish formulary, determining
whether enrollee has access to a drug
•
Rules regarding formulary placement and model formulary
categories, classes, and Formulary Key Drug Types
developed by United States Pharmacopeia (USP).
•
USP now will update formulary guidelines every three
years instead of annually.
• Enrollees
can seek exception to get drug not on formulary
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Reimbursement Take-Aways
•
Reimbursement varies by setting
•
Take advantage of new technology mechanisms when
possible; assess potential eligibility before pricing product
•
Important to examine how drug discounting practices and
dosage can affect ASP-based reimbursement
•
Formulary placement is critical for Part D drugs, but the
significance of the USP Model Guidelines is decreasing
•
Payment systems are updated annually through the
rulemaking process and legislative changes also are
frequent; close monitoring of changes is critical
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Biotech Drug Pricing and
Follow-on Biologics
Jeff Bass
Director, Global Government Affairs
Amgen, Inc.
Pricing of Biotech Drugs
• What are some examples of current biotech drug
prices?
• How do they compare to “small molecule”
medicines?
• Why are biotech drug prices so high?
• As a manufacturer, how do you price a new
biotech drug?
• How will Follow-On Biologics impact biotech
drug prices?
Examples of Current Biotech Drug Prices
(Typical Costs Per Patent Per Year)
• Insulin (insulins and insulin analogs)
– Humulin, Novlin, Humalog $600 to $2,400
• Cancer (these are colon cancer examples)
– Avastin, Erbitux, Vectibix $80,000 to $120,000
• Rheumatoid Arthritis (TNF inhibitors)
– Enbrel, Humira, Remicade $15,000 to $25,000
• Multiple Sclerosis (interferon examples)
– Avonex, Betaseron, Rebif $5,000 to $18,000
Biotech Drug Prices – Some TLAs
• WAC – Wholesale Acquisition Cost
• WAP – Wholesale Acquisition Cost
• AWP – Average Wholesale Price
• ASP – Average Sales Price
• AMP – Average Manufacturer Price
• WAMP – Widely Available Market Price
• BP – Best Price (used in Medicaid)
This alphabet soup makes MSRP look simple!
How Biotech Drugs Compare to
“Small Molecule” Drugs
Amino Acids
Molecular Weight
(Daltons)
Tylenol
0
152
Methotrexate
1
454
Lipitor
2
1,209
Biotech drugs grown in cells (e coli bacteria or mammalian cells)
Insulin
51
5,808
Epo
165
30,400
Enbrel
934
150,000
Other Ways Biotech Drugs Are
Different
• Biotech drugs are usually injected (big proteins don’t
survive digestion intact)
• Biotech drugs are often administered by in a clinic or
hospital rather than by the patient
• Biotech drugs are often a protein that occurs naturally in
the body and can have lower side effect profiles
• Biotech drugs take longer to discover and develop
• Biotech drugs take longer for FDA approval
• Biotech drugs are typically made in living cells
• Biotech drugs are are very fragile compared to small
molecules and often refrigerated
Why Biotech Drug Prices Are So
High
• R & D cycle is much longer
• R & D cycle has a much higher failure rate
• Biotech drugs often meet a more challenging and life
threatening medical need
• Biotech molecules are really big, fragile and hard to
make
• Biotech manufacturing involves modifying and then
growing living cells
• Only clinical trials can determine final safety and efficacy
of the protein (no generics, so far)
How We Price a New Biotech Drug
• What is the value of the new drug relative to
unmet medical need?
• What are the closest substitutes and how close
are they in meeting the need?
• What are the prices of the close substitutes?
• Is the drug life saving, life extending or impactful
on disability?
• Are there measurable cost offsets?
Example: Pricing EPO In Dialysis
(1989)
• Kidneys produce EPO; when they fail, extreme anemia can
result
• Treatment of the anemia was with iron and occasional whole
blood transfusions (transfusions cost about $5,000 per patient
per year)
• Recombinant EPO helped the anemia and avoided almost all
transfusions
• Recombinant EPO was unique and “first in class” – no
competitors
• Recombinant EPO was priced at annual cost of transfusions
plus a small premium for better safety and efficacy than
transfusions (about $5,500 per patient per year)
Example: Pricing Filgrastim In
Cancer (1991)
• Chemotherapy that kills cancer cells also kills white
blood cells (neutrophils)
• Patients were routinely hospitalized for febrile
neutropenia
• Cost of these hospitalizations was typically $2,500 per
episode
• Recombinant filgrastim reduced hospitalization by 50%
in clinical trials
• Preventative antibiotic therapy was a poor substitute and
didn’t work well; no other options available
• Recombinant filgrastim priced at expected value of
savings in hospitalization (cost offset = 50% X $2,500)
plus a slight premium for increased safety (about $1,400
per chemotherapy cycle)
How Follow-On Biologics Will
Affect Biotech Prices
•
Current technology cannot fully characterize (shape, form and function)
of large proteins
•
Minor manufacturing changes can dramatically change a protein’s
effect in the body (Eprex example in Europe)
•
The early research (what is the protein; how does it work; what is it’s
sequence) won’t have to be repeated (the FOB “R” cost in R&D can be
less)
•
Full clinical trial testing will be needed to verify safety and efficacy (the
FOB “D” cost in R&D likely to be just as high as the original molecule)
•
Final Costs of FOBs likely to be much closer to those of the innovator
biotech drugs than current generics are to small molecules
•
Recent Congressional Budget Office estimates put FOB savings at 20
to 25% below that of the innovator biotech drugs
•
This is MUCH less than the savings of generics over small molecules
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