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FDA will publicly scold drug companies that try to derail generics

Joe Mont | May 17, 2018

The Food and Drug Administration’s latest tactic for driving down prescription drug costs: publicly naming and shaming prescription drug makers that try to block generic equivalents of their products.

FDA Commissioner Scott Gottlieb announced the FDA’s new strategy to encourage generic drugs on Thursday, describing efforts to shine light “on situations where drug makers may be pursuing gaming tactics to delay generic competition.”

The move, he said, is part of a broader strategy of “advancing policies that increase competition to help make drugs more affordable and improve access.” Among these efforts is focusing “on addressing tactics we sometimes hear of branded companies pursuing to forestall expected generic entry.”

Gottlieb described one common scenario for how companies create obstacles for generic developers that involves purchasing samples of their brand drugs.

Generic drug developers need samples of the brand drug to develop their alternative product and, as required for FDA approval, conduct testing to show that their product is bioequivalent to the brand drug. A generic drug developer generally needs 1,500 to 5,000 units of the brand drug to perform what are often relatively straightforward studies for FDA approval.

“Without these samples, generic drug makers may not be able to develop generic alternatives,” Gottlieb said. “Yet, the FDA has heard that some brand companies will adopt tactics to make it hard for the generic companies to purchase these brand drugs at a fair value and in the open marketplace.”

Gottlieb said the FDA is “making public a list of companies that have potentially been blocking access to the samples of their branded products.”

Some drug makers have either refused to sell samples of products or placed restrictions in their commercial contracts and agreements with distributors, wholesalers, or specialty pharmacies that limit their ability to sell samples to generic drug developers for testing, he said.

Gottlieb stressed that “a path to securing samples of brand drugs for the purpose of generic drug development should always be available.”

Under the new policy, the FDA will also notify the Federal Trade Commission, the agency responsible for addressing anticompetitive business practices, about these inquiries.

Generic drug developers can request that the FDA send a letter to the brand company stating that its Risk Evaluation and Mitigation Strategy (REMS) program (a drug safety initiative the FDA can require for medications with serious safety concerns to help ensure the benefits of the medication outweigh its risks) cannot be used to limit sample supplies. These notifications are called Safety Determination Letters and, to date, the FDA has issued 21 of them, Gottlieb explained.

The FDA Website now includes a list of inquiries it has received from generic drug developers who report having trouble accessing testing samples they need. The list, which will be periodically updated, includes, brand drug company, the drug product, and the number of inquiries received.

“We’re taking these steps today because we believe greater transparency will help reduce unnecessary hurdles to generic drug development and approval,” Gottlieb said.

The effort dovetails with recently announced efforts by the White House to improve prescription drug access and affordability.

On May 11, President Trump and the Department of Health and Human Services announced their “blueprint” for lowering prescription drug costs. “Excessively high drug prices, foreign freeloading, and a system rigged to reward list price increases, are burdening the American people,” a White House statement says.

Among the action items, HHS will:

  • Take steps to end the gaming of regulatory and patent processes by drug makers to unfairly protect monopolies;
  • advance biosimilars and generics to boost price competition.
  • evaluate the inclusion of prices in drug makers’ ads to enhance price competition;
  • streamline and accelerate the approval process for over-the-counter drugs;
  • speed access to and lower the cost of new drugs by clarifying policies for sharing information between insurers and drug makers;
  • avoid excessive pricing by relying more on value-based pricing by expanding outcome-based payments in Medicare and Medicaid;
  • work to give Part D plan sponsors more negotiation power with drug makers;
  • examine which Medicare Part B drugs could be negotiated for a lower price by Part D plans, and improve the design of the Part B Competitive Acquisition Program;
  • prohibit Part D contracts that include “gag rules” that prevent pharmacists from informing patients when they could pay less out-of-pocket by not using insurance; and
  • work across the Administration to address “intellectual property theft and foreign freeloading.”

In prepared remarks, Trump noted that, last year, the FDA approved more than 1,000 low-cost generics, “the most in history, which has already saved the American people nearly $9 billion.”

“We’re going to take on one of the biggest obstacles to affordable medicine: the tangled web of special interests,” he added. “The drug lobby is making an absolute fortune at the expense of American consumers … Everyone involved in the broken system—the drug makers, insurance companies, distributors, pharmacy benefit managers, and many others—contribute to the problem.”