Key Pharma Measure Stripped from Eleventh Hour Funding Bill
At midnight on December 20, 2024, funding expired for an interim package (HR 4366), triggering fears of a government shutdown. However, President Biden signed a Continuing Resolution (HR 10545) on December 21, narrowly averting a crisis and keeping the government funded through March 14, 2025. While dramatic, this scenario is routine. Since the 1974 Congressional Budget Act, only four budgets have passed on time. Without timely approval, lawmakers resort to Continuing Resolutions (CRs) to avoid shutdowns, often passing multiple CRs annually. Between 2010 and 2022, Congress approved 47 CRs amid four shutdowns lasting from one to 176 days.
The December CR lacked significant new provisions. While it secured $110 billion in disaster relief and extended the farm bill for a year, it omitted key pharmaceutical reforms. Notably, measures addressing brand-name drugmakers’ abuse of the FDA’s Q1/Q2 sameness rule and patent thickets were removed, delaying cost-cutting generic and biosimilar competition. Efforts like the Affordable Prescriptions for Patients Act and new PBM reform proposals are expected to return this session. PBM-related reforms would enhance transparency and ban conflicts of interest. Meanwhile, the Federal Trade Commission continues scrutinizing PBM practices, with more findings expected soon. Reform momentum will likely intensify in 2025.
NACDS Applauds States for Advancing PBM Reform
On January 8, the National Association of Chain Drug Stores (NACDS) praised growing state-level PBM reform efforts. It highlighted Arkansas’ Legislative Council making Rule 128 permanent, ensuring fair pharmacy reimbursements and holding out-of-state PBMs accountable. The rule mandates PBMs disclose reimbursement methods and empowers the state insurance commissioner to approve cost-to-dispense rates. NACDS also noted Massachusetts’ new law (S. 3012), which strengthens PBM regulations, caps co-pays for certain drugs, and bans higher co-pays than cash prices. NACDS President Steve Anderson applauded these actions, emphasizing nationwide momentum, with 24 states enacting 33 reform bills in 2024 alone to lower drug costs and protect pharmacies.
Protecting ‘Skinny Label’ Provision Is Major Priority for Generics in 2025
One key priority for generic drug companies this year is protecting the Hatch-Waxman “skinny label” provision in FDA regulations. This rule allows generics to gain FDA approval by excluding patented uses from brand-name drug labels, focusing only on non-patented indications. Despite seeming inconsistent with federal requirements that generic labels match brand counterparts, this carve-out speeds market entry and fosters competition without triggering costly patent infringement lawsuits. Skinny labeling combats excessive patenting that extends brand monopolies, helping reduce drug prices and increase access to affordable medicine. According to The American Journal of Managed Care, skinny labels generated nearly $15 billion in Medicare savings from 2010 to 2015 alone.