Children often experience the same conditions as adults, many of which can be treated with pharmaceuticals. Yet, it was estimated in 1999 that <25% of all drugs marketed in the US had a paediatric indication, meaning that they lacked data and product labelling on safety, efficacy and dosing in children. Because of this, physicians are often confronted with the dilemma of whether to prescribe a medication for a child 'off label' and possibly put the child at risk or to deny the child the potential benefits of off-label therapy.
In efforts to remedy this situation, the Food and Drug Administration Modernization Act of 1997 (FDAMA) included The Pediatric Exclusivity Provision, Section 505A, that provided a 6-month market exclusivity extension as an incentive for pharmaceutical manufacturers to conduct clinical trials in children as requested by the FDA. This provision was renewed in 2002 as the Best Pharmaceuticals for Children Act (BPCA) and again as the Pediatric Research Equity Act of 2007. Since the FDAMA was passed, 355 product labelling changes specific to children have been made.
By design, paediatric exclusivity generates a cost to society by delaying the entry of less expensive generic versions of the drug into the market. This extra 6 months of unchallenged revenue provides an incentive for manufacturers to generate paediatric drug data when these incentives are not provided by the market. In a 2001 Report to Congress, the FDA estimated that the cost to consumers over the next 20 years would be $US13.9 billion ($US695 million per year). Critics contend that these costs reflect a disproportionate benefit to manufacturers, whose additional profits from having 6 additional months of market exclusivity are far greater than the costs of conducting the trials. Improvements in children's healthcare by more accurate dosing and reductions in adverse drug effects have been postulated but have been much harder to measure. Furthermore, many medications that are used in children are multisource products (i.e. they are available generically) and therefore do not qualify for the Pediatric Exclusivity Provision. Because of this, there is little incentive for manufacturers to study these drugs in children. Instead, the BPCA established funding for a National Institutes of Health programme to contract for paediatric studies in off-patent products.
In this paper, we estimate the cost impact of the 6-month exclusivity extension policy on the Utah Medicaid drug programme. To do this, we selected three classes of drugs: selective serotonin reuptake inhibitors (SSRIs), HMG-CoA reductase inhibitors (statins) and ACE inhibitors (ACE-Is). These classes were selected for evaluation as they have the most representation on the list of products granted paediatric exclusivity and are top-selling drug classes in the Medicaid programme. SSRIs are commonly used in both adult and paediatric patients, and statins and ACE-Is are regularly used in adults but rarely used in children. Two drug classes that are often used in children, amphetamines/stimulants and sodium channel blocker anticonvulsants, were identified but not included in the analysis because of many factors that precluded our ability to accurately conduct a cost analysis. In the case of amphetamines/stimulants, methylphenidate and Adderall® were granted patent extensions through the Pediatric Exclusivity Provision, but neither could be included in the analysis. The patent for methylphenidate was overly complex because of various dosage forms and because the patent extension applies to the drug moiety in all dosage forms. Adderall® could not be included in the analysis because of product line extensions (e.g. Adderall XR® ) that captured much of the market share prior to the original product's patient expiration, leading to little generic shift. In the case of sodium channel blocker anticonvulsants, our analysis could not be conducted on the drug lamotrigine because of a legal battle that caused the first generic exclusivity to last 3 years rather than the typical 6 months. …