Gottlieb: 'End the Shenanigans' on Delaying Generic Drug Competition

Regulatory NewsRegulatory News
| 08 November 2017 | By Zachary Brennan 

US Food and Drug Administration (FDA) Commissioner Scott Gottlieb on Wednesday called to "end the shenanigans" that often delay or restrict generic drug competition.

The comment followed Gottlieb's discussion of the ways in which brand-name drug companies can use Risk Evaluation and Mitigation Strategies (REMS) or other tactics to prevent generic companies from purchasing drug product to run bioequivalence or bioavailability studies necessary for approval.

Federal Trade Commission (FTC) acting chair Maureen Ohlhausen also said Wednesday's meeting on prescription drug competition was about understanding how the markets are working, with an eye toward not just what antitrust enforcers can do, but what regulatory changes are necessary.

Draft Guidance

The meeting coincided with FDA's release Wednesday of new draft guidance for industry, called, "Use of a Drug Master File for Shared System REMS Submissions," to further streamline the submission and review process for shared system REMS, which are those that include more than one medication.

"Currently, under a shared system REMS, multiple applicants need to coordinate the submission of identical REMS-related documents for their respective applications. This draft guidance explains the FDA's current thinking that the use of a single Drug Master File (DMF) for shared system REMS submissions will allow manufacturers with products in shared system REMS programs to submit one collective set of files to the agency. This is a first step toward additional actions FDA plans to take to making sharing a single REMS easier," Gottlieb said.

He noted that he hopes this new REMS document template will streamline the drafting and review of shared REMS.

Panel Discussion

Several speakers following Gottlieb echoed his concerns on companies gaming the system to maintain monopolies that keep drug prices high.

Rutgers law professor Michael Carrier discussed pay-for-delay agreements -- where companies are paid to keep their competitor generics from the market -- product hopping, where products are reformulated and patients are migrated to a new product before competitors are marketed, citizen petitions -- which are meant to raise legitimate concerns about follow-on products, but often come near the end of the product's exclusivity (though 98% are denied by FDA) and the REMS restrictions Gottlieb mentioned.

Associate Professor of Medicine at Harvard Medical School Aaron Kesselheim also discussed other factors impacting generic drug uptake, including advertising and promotions for branded products, patient and physician skepticism of the quality of generic drugs, cost and availability issues, and other hurdles to prevent competition, such as patents covering secondary parts of pharmaceuticals.

Stephen Schondelmeyer, professor and head of the department of pharmaceutical care and health systems at the University of Minnesota, mentioned that active pharmaceutical ingredient (API) contracts can limit or manipulate competition and need to be examined further. He offered the example of the atenolol shortage as a case where it's unclear what the cause of the shortage is.

Chip Davis, president of the generic drug lobbying group AAM, also explained how generic drug companies are consolidating as there are essentially three large purchasing consortia controlling 90% of the market.

"Let me be clear: Our members are not the only ones raising sustainability concerns. Purchasers are reinforcing these deflationary trends too," Davis said. "Simple economics dictates that you won't have 10 to 20 generic companies supporting three buyers."

In terms of solutions, Kesselheim was the only panelist to call on FDA to consider a policy whereby generic drugs could be imported more systematically to enlarge the US market. He also raised the possibility that for certain niche markets, the US government could offer purchasing contracts to allow for guaranteed demand, which is already done with children's vaccines.

Bernstein senior analyst Ronny Gal also urged the FTC to put out its thinking on pharmaceutical company-negotiated contracts with pharmacy benefit managers (PBMs), as several such cases will be decided over the next 24 months.

Other panels on Wednesday discussed the role of PBMs and group purchasing organizations in the supply chain, as well as steps to encourage entry and expand access through lower prices.


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