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House Committee Probes Restricted Distribution Systems Delaying Generics

Posted 24 March 2017

House Committee Probes Restricted Distribution Systems Delaying Generics

The House Committee on Oversight & Government Reform on Wednesday heard testimony on how pharmaceutical companies use restricted distribution systems to delay generic drug competition.

In his opening statement, Subcommittee on Health Care, Benefits and Administrative Rules Chairman Rep. Jim Jordan (R-OH) said that some drugmakers are manipulating the regulatory framework to block competitors from accessing the reference drugs they need to conduct bioequivalence testing to get generics approved by the US Food and Drug Administration (FDA).

 In the past, drugmakers have been accused of using FDA-mandated risk evaluation and mitigation strategies (REMS), which oftentimes include restricted distribution schemes meant to be part of safety measures for risky drugs, to refuse to sell their product to generic developers.

"If a brand firm can effectively block generic firms from accessing brand products for bioequivalence testing, it may be able to continue to prevent generic competition even after its patents on these products expire. If successful, this conduct could upset the balance of the Hatch-Waxman Act and, more broadly, undermine the core principle of the patent system," the Federal Trade Commission wrote in an amicus brief in a dispute between Mylan and Celgene over Celgene's use of REMS to restrict access to Thalomid (thalidomide) and Revlimid (lenalidomide).

However, Jordan said, some "bad actors" such as Turing Pharmaceuticals, have employed self-imposed restricted distribution schemes to thwart competition, even when a product's patent protection has expired.

Bruce Leicher, who spoke on behalf of Momenta Pharmaceuticals and the Association for Accessible Medicines (formerly the Generic Pharmaceutical Association), said it has become increasingly difficult for generic drugmakers to access reference drugs in recent years.

According to Leicher, Momenta and other companies have abandoned generic development programs as a result of not being able to get reference drugs to perform bioequivalence studies.

"We're now forced to consider how difficult to obtain the brand product. In cases where access is restricted we have not initiated some programs," Leicher said.

As a result, Leicher urged congress to pass legislative measures, such as those proposed in the Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act to prevent drugmakers from refusing to supply generic companies with drugs.

According to Gerard Anderson, a professor at Johns Hopkins Bloomberg School of Public Health, these restricted distribution schemes undermine the market for generic drugs.

"The generic industry works incredibly well when there are three, four competitors in the market. It works less well when there are two, and it doesn't work at all when there are none," Anderson said.

In her testimony, FDA Center for Drug Evaluation and Research Director Janet Woodcock said there isn't much FDA can do to address the issue other than request that reference product is provided to generic drug makers.

When a REMS is in place, Woodcock says, FDA will review a generic drugmaker's bioequivalence protocol and notify the innovator company in writing to let it know the REMS restriction does not apply to supplying the product to the generic company.

"Nevertheless, sponsors do continue to withhold products. We've had about 150 inquiries from generic firms about difficulties that they have had obtaining product for bioequivalence testing," Woodcock said, noting that the agency doesn't have the authority to require drugmakers provide their products to other companies.

When it comes to voluntary restricted distribution schemes, Woodcock said there's even less the agency can do.



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