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Product Hopping: E&C Hearing Addresses Restrictions to Generic Competition

Posted 19 September 2019 | By Zachary Brennan 

Product Hopping: E&C Hearing Addresses Restrictions to Generic Competition

A subcommittee of the House Energy & Commerce Committee held a hearing on Thursday raising questions around some of the tactics pharmaceutical companies use to block competition, including the controversial use of product hopping.

Product hopping, which involves companies reformulating drugs to restrict competition, can include many different types of reformulations, such as a change from a capsule to a tablet, a change in dosing or strength or a reformulation to an extended-release drug, according to the committee.

Michael Carrier, distinguished professor of law at Rutgers Law School, explained how a 2009 analysis found $28 billion worth of drugs were subject to product hopping, including Mylan’s Advair (fluticasone/salmeterol), AstraZeneca’s Nexium (esomeprazole) and Prozac (fluoxetine).

Rep. Jan Schakowsky (D-IL) said that she’s going to introduce a carefully crafted bill to provide the Federal Trade Commission (FTC) with the authority to take action against a manufacturer using product hopping and to seek remedy for any unjust profits. The bill also would allow greater transparency in drug pricing.

Jeffrey Francer, SVP and general counsel of the Association for Accessible Medicines, offered the example of Suboxone, first approved as a tablet and then later approved as a film version to avoid impending generic competition. Promotional claims that the new film version was safer were later determined to be false.

“As a result of these allegedly false marketing claims, which were intended to further the sponsor’s ‘product hopping’ strategy, the sponsor has now been indicted by the Department of Justice for, among other things, mail fraud, wire fraud, health care fraud, and conspiracy,” Francer explained.

Carrier noted at the hearing that the FTC can go after these cases in court, but it has “barely” dealt with product hopping. Legislation would be incredibly important, as the FTC has only gone after the most extreme cases of pay-for delay settlements six times in the past 20 years.

He also suggested the committee could ask the FTC to do a report on product hopping. Joanna Shepherd, professor of law at Emory University School of Law, agreed that a report could help.

The issue of product hopping is also part of a wider conversation on the affordability of prescription drugs.

David Mitchell, founder of the nonprofit Patients for Affordable Drugs, wrote in his written testimony: “Big Pharma wants us to ask this question: What are we willing to pay to save a life? And that’s easy. When it’s your child’s lungs on the line, when it’s your wife’s diabetes, your husband’s cancer, the answer is ‘anything.’ … But that’s the wrong question. We should be asking: What is the right amount of money that drug companies should make on these drugs?”

E&C Hearing

Editor's note: Article updated to reflect that the six cases the FTC has targeted were pay-for-delay cases, not just product hopping cases.

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