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FDA website aims to deter system-gamers from blocking generic competition

The U.S. Food and Drug Administration unveiled a new website aimed at shedding light on situations where brand-name drugmakers may be pursuing gaming tactics to delay generic competition.

Among those identified on the site as trying to block generics makers are Pfizer Inc., Biogen Inc., GlaxoSmithKline PLC, Novartis AG, Celgene Corp., Jazz Pharmaceuticals PLC and Roche Holding AG.

Teva Pharmaceutical Industries Ltd. and Mylan NV — two of the largest makers of generic medicines — also were named by the FDA as trying to thwart their rivals.

FDA Commissioner Scott Gottlieb is hoping that by publicly posting the information online, innovator drugmakers will be deterred from trying to stifle generics companies by preventing them from obtaining the samples they need to conduct studies for U.S. approval.

He said the FDA has received more than 150 inquiries from generic drug developers seeking assistance in obtaining samples from brand-name companies.

"I want to be very clear: A path to securing samples of brand drugs for the purpose of generic drug development should always be available," Gottlieb stated.

Not shaming

The unmasking of the system-gamers — part of the Trump administration's strategy to lower drug prices, unveiled May 11 — is not an attempt to shame them, but rather, to discourage those companies from engaging in abusive practices, the FDA chief told reporters at a May 14 media briefing at Health and Human Services headquarters in Washington, D.C.

"I don't think this is publicly shaming," Gottlieb said. "I think this is providing transparency in situations where we see certain obstacles to timely generic entry."

He said posting the information could potentially serve as a deterrent to "engaging in practices that are antithetical to the spirit, if not the letter" of the 1984 Drug Price Competition and Patent Term Restoration Act, commonly called the Hatch-Waxman Act — the law that created the generic drug industry.

He reiterated that point and provided other clarifying details during a May 15 briefing in Washington hosted by the Alliance for Health Policy and APCO Worldwide.

"I'm identifying the problem," Gottlieb said.

But the Pharmaceutical Research and Manufacturers of America said the release of the generics inquiries "lacks the proper context and conflates a number of divergent scenarios." The lobbying group said additional context was essential and called on the FDA to "give innovator companies the opportunity to submit their appropriately redacted response to the recipient of a safety determination letter."

Gottlieb first acknowledged he was considering launching the website last summer.

Gaming tactics

The commissioner said brand-name companies try to prevent generics from obtaining samples of innovator medicines by using such tactics as abusing the agency's required risk programs — risk evaluation and mitigation strategies, or REMS — which are meant to ensure that the benefits of medications outweigh their risks.

Another tactic innovator companies have used is placing restrictions in their commercial contracts or agreements with prescription drug distributors, wholesalers or specialty pharmacies to try to limit their ability to sell the brand-name drug samples to generic developers for testing, Gottlieb said.

The generic companies need the samples of the brand-name drug to develop to conduct testing to show the copied products are bioequivalent to the innovator medicine for FDA approval.

A generic company generally needs 1,500 to 5,000 doses of the brand-name drug to perform those studies.

Gottlieb said the FDA has heard that some drugmakers have either refused to sell samples of products with certain REMS requirements that restrict distribution — Elements to Assure Safe Use, or ETASU — to try to block the generic competitors.

Brand-name companies also use the ETASUs to impose conditions on the sale of their samples, making it impossible or hard for generic companies to comply with those terms, Gottlieb said.

FDA actions

When the FDA hears from generics companies, the agency takes several steps to determine the factors at play and appropriate next steps.

Gottlieb said the FDA found that in many cases where branded companies have cited REMS as the reason for refusing to provide samples, there was no such program in place.

In those cases, the FDA has informed the generics maker there are no FDA-required restrictions on the distribution of the drug that would impede obtaining samples and also notified the Federal Trade Commission — the agency responsible for addressing anticompetitive business practices.

"We also encourage the generic drug developers to raise these cases with the FTC if they believe that anticompetitive conduct has taken place," Gottlieb said.

Given the FDA has received inquiries from generics makers where the innovator drug is subject to REMS with ETASU, that suggests the "brand companies may be inappropriately using limited distribution to impede generic drug competition."

But even in cases where the FDA confirms there is an existing REMS program with ETASU, "generic drug developers should be able to secure samples of the product," he said.

The FDA chief noted that his agency has a voluntary process in place through which generics companies can submit their bioequivalence testing protocols to the agency, which evaluates them to ensure that their plan contains safety protections comparable with the brand-name drugmakers' REMS program.

At the generics manufacturers' requests, the FDA has sent at least 21 "safety-determination letters," or SDLs, to the innovators notifying them that their REMS program does not forbid them from selling their products to the copycat companies for comparative testing.

On its new website, the FDA posted a list of the inquiries it has received from generics companies who have reported having trouble accessing testing samples they need.

It identifies the brand-name companies, the drug and the number of inquiries the FDA has received.

It also identifies the products that have been the subject of the SDLs from the FDA clarifying that there are no REMS-related reasons why samples of their product cannot be provided to generic developers.

Gottlieb said the site would be updated periodically.

"We're taking these steps today because we believe greater transparency will help reduce unnecessary hurdles to generic drug development and approval," he said. "We'll continue to look at more ways we can expand upon today's action and call public attention to situations where the careful balance that Congress sought between product innovation and access may be being disrupted. We'll also continue working with the FTC where there may be anticompetitive business practices at play."