Regulatory Focus™ > News Articles > Using Patient Safety Schemes to Delay Generic Drugs Costs Consumers Billions, Study Finds

Using Patient Safety Schemes to Delay Generic Drugs Costs Consumers Billions, Study Finds

Posted 24 July 2014 | By Alexander Gaffney, RAC

Using Patient Safety Schemes to Delay Generic Drugs Costs Consumers Billions, Study Finds

A new report sponsored by the generic pharmaceutical industry claims that branded pharmaceutical companies are using Risk Evaluation and Mitigation Strategies (REMS) to great effect—just not the effect that regulators had intended.

Background: What are REMS?

REMS were first introduced under the 2007 Food and Drug Administration Amendments Act (FDAAA), and were meant to act as a regulatory hedge against potentially risky products. In plain terms, they are meant to keep drugs available for the patients who need them most, while simultaneously limiting access by patients or consumers who are unlikely to benefit from their use.

REMS typically include the following elements: A communication plan, Medication Guides (MedGuides), an implementation plan and elements to assure safe use (ETASU) of the drug.

ETASU's are REMS' most stringent requirements and include prescriber requirements, enrollment forms, training materials, process controls, consent forms, safety controls and monitoring programs. Some REMS will only include one or two of these elements, while others, such as the REMS for isotretinoin, may include nearly all of them.

But ETASUs are generally only appropriate for the riskiest products, such as those known to cause birth defects. For many other drugs, a communication plan is more appropriate. A communication plan under a REMS usually includes "Dear Healthcare Professional" letters, widespread dissemination of information to professionals through other communications and fora, and specific information about the REMS intended to inform good prescribing practices.

The plans are, at their core, intended to communicate risks and the methods by which they can be minimized. As of July 2014, FDA has approved 32 communication plans as part of an actively approved REMS (others have since been released from their REMS requirements).

REMS are also required to include assessment plans, which are intended to show whether a REMS plan is working as intended to mitigate risks. If a study shows that a REMS approach is not working, FDA may require it to be strengthened or the drug pulled off the market. These plans, however, have been identified as being faulty by government auditors.

As of 24 July 2014, there are 71 approved individual REMS plans, as well as six class-wide REMS plans. A full list may be found on FDA's website.

A Delaying Tool

But as Regulatory Focus has covered in the past, REMS plans are approved by regulators—not created by them. And as such, they and their elements can be patented and used by companies to restrict market access to their competitors.

Perhaps the most obvious way companies can restrict market access is by using an ETASU to physically prevent a company from obtaining a drug, thereby restricting the other company (i.e. generic drug manufacturer) from being able to copy it.

And because REMS can be patented, a company can also use its patents to delay the entry of generics. While FDA can waive REMS requirements if it becomes clear that the REMS could burden companies, patients or healthcare providers, this can still result in delayed market access. In addition, FDA often calls for a "single shared REMS" which covers both the reference drug and its generic. As Focus explained in May 2013, the process of negotiating these changes can often be a long and difficult process, since FDAAA isn't clear on what happens if companies fail to make concessions to ensure a single REMS covers both drugs equally.

To date, FDA has not issued guidance on resolving these disputes, though it has said it might do so in the future. (More on that Citizen Petition here.)

New Study Pegs Cost at $5.4 Billion

And according to the Generic Pharmaceutical Association (GPhA), those delays have consequences.

In a new report issued on 23 July 2014, a GPhA-sponsored study conducted by Matrix Global Advisors pegged the annual cost of REMS-based delays at $5.4 billion, with costs spread out among various stakeholders.

The problem, according to Alex Brill, the report's author, is that a sizeable portion of new drugs are given REMS.  

"Our survey results indicate that brand manufacturers are indeed using REMS to deny generic manufacturers’ access to brand drug samples," Brill wrote. Branded manufacturers "have also begun applying restricted access programs to drugs for which the FDA has not required a REMS program," Brill found.

By looking at 40 drugs reported by generic pharmaceutical companies, Brill found that 16 were subject to REMS restrictions, while another 26 were subject to non-REMS restrictions.

Had all of those drugs been able available to consumers without restriction, the savings would have been substantial, Brill found: $2.4 billion saved by private insurers, $1.8 billion by the federal government, $960 million by individuals and $240 million by state and local payors.

While the data aren't perfect—Brill's data relies on generic companies self-reporting the length of the restrictions, for example, and non-REMS restrictions are also lumped into the study—it's nevertheless one of the first attempts to quantify how much market access restrictions cost the US economy.

And given the US Federal Trade Commission's ongoing interest in the issue, it might not be the last time we hear about the cost of keeping generic drugs from the market under the guise of patient safety.


GPhA Study

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