Enough already with REMS abuse in generic drug development

Pharmaceutical CommercePharmaceutical Commerce - July/August 2016

On first hearing what’s been going on in the disputes between brand drug companies and their generic competitors over obtaining samples for testing, the initial reaction is, here’s an obscure digression from the grand process of drugs going off-patent, who cares? After all, generics constitute around 90% of US drug prescribing; blockbuster drugs routinely go off-patent and both the innovator pharma companies and the generic competitors are getting by. The grand Hatch-Waxman compromise between the two, although much amended over the years, works.

Nevertheless, this dispute has been dragging on for years and shows no sign of resolution. Yet another Congressional hearing was held (the Senate Judiciary, in late June) and another bill, the Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act (S. 3056)* has been introduced; FDA took one stab at correcting the problem (which mostly hasn’t worked), and the Federal Trade Commission has gone back and forth on whether to invoke antitrust rules. The issue is burning up time and resources at FDA and among pharma companies that would be better spent on more pressing matters.

The problem, in a nutshell, is that generic companies need samples of branded drugs in order to perform the bioequivalence studies to gain FDA approval. But some branded companies make it very difficult for the generic firms to obtain them (even though the drugs are in commercial distribution, and even though a legitimate sale and a fair price could be agreed to). Even more sand is thrown in the gears of progress when the branded drug is approved with a Risk Evaluation and Mitigation Strategies (REMS) program, which requires additional safeguards for how the drug is to be dispensed to patients. Months can go by in frustrating negotiations and litigation. The Generic Pharmaceutical Assn. puts a more-than-$5-billion cost on this disputation. Money is wasted, action is delayed and the goals of Hatch-Waxman are undercut.

There appear to be three distinct situations leading to the delays:

When a branded drug company has a closely controlled distribution system enabling it to simply choose whom to sell to;
  • When a drug has a REMS program, and the branded drug company invokes the terms of REMS program to “protect” clinical trial patients;
  • When the details of the REMS program are claimed to be patented intellectual property (IP), and not to be shared.

Antitrust and IP lawyers have feasted on the intricacies of the legal issues that can be invoked here, but my point of departure is very simple: getting the samples to conduct a study is not an automatic path to approval; it’s the rules of the game as defined by Hatch-Waxman. Refusing to provide samples is the little boy who takes his baseball and bat away from the playground because he can’t hit a home run. It’s petty and a little sleazy.

The REMS factor is more complicated, but the point I would make is that the original intent of REMS regulations was to speed the approval of drugs that had potentially dangerous side effects; manufacturers and FDA regulators agree on how to address those risks with follow-up attention after the drug is on the market. (More than a few REMS programs have been dropped after commercial use showed a potential risk was not an actual one.) Using REMS to block generic development is a subversion of that original intent.

There are legitimate reasons to have restricted or exclusive distribution agreements, especially for specialty pharmaceuticals for which patients benefit from extra attention and support. The danger here, for branded pharma companies, is that restricted distribution is an opportunity for abuse, as the infamous Turing Pharma situation of last year demonstrated. PhRMA (and others) who have supported the current bioequivalency-study obstacles run the risk of further poisoning the public perception of restricted distribution, which in turn could throttle the patient support the programs provide.


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