U.S. Supreme Court Upholds Affordable Care Act: Significant Aspects of Affordable Care Act for Generic Pharmaceutical Companies
On June 28, 2012, the U.S. Supreme Court upheld the Patient Protection and Affordable Care Act (Pub. L. 111-148) (Affordable Care Act). See National Federation of Independent Business et al. v. Sebelius, Secretary of Health and Human Services, et al., No. 11-393. The Affordable Care Act makes the following changes in law that are of particular significance to manufacturers of generic drugs and biological products: (1) creation of an abbreviated licensure pathway for biological products shown to be biosimilar to, or interchangeable with, an FDA-licensed biological reference product, pursuant to the Biologics Price Competition and Innovation Act (BPCIA); (2) revision of the definition of Average Manufacturer Price (AMP), a price used by the Medicaid program to calculate rebates paid by generic drug companies and reimbursement amounts paid to pharmacies that dispense generic drugs; (3) increase in the amount of Medicaid rebates paid by drug manufacturers; (4) change in the calculation of Federal Upper Limits (FULs), which are prices used to reimburse providers that dispense drugs under the Medicaid program; (5) expansion of the 340B drug pricing program, which limits the cost of drugs to certain providers; (6) alleviation of the labeling roadblock for FDA approval of generic drugs when the reference brand product changes its label; and (7) reduction of the Medicare Part D coverage gap, referred to as the “donut hole”. The Affordable Care Act makes additional changes in law, not discussed in this advisory, that are applicable to all drug manufacturers not discussed in this advisory, such as amendments to the False Claims Act’s “public disclosure bar” and “original source” provisions. See http://www.fcaalert.com/2010/11/articles/relator-jurisdiction-issues/tennessee-court-holds-selfreporting-to-government-does-not-bar-relator-action/; http://www.fcaalert.com/2010/06/articles/relator-jurisdiction-issues/supreme-court-denies-certiorari-on-original-source-question/.
To view the complete advisory, click here.