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Prescription: Washington

Generics Companies Press for REMS Relief

Potential Law Would Clarify When Brand-Name Manufacturers Must Supply Drug Samples
Stephen Barlas

Generic-drug companies have gone to federal court in the past half-decade to sue brand-name companies that refuse to sell samples of drugs that have distribution restricted by risk evaluation and mitigation strategies (REMS). REMS are restricted distribution programs the Food and Drug Administration (FDA) forces companies to establish when it approves drugs that have adverse reaction profiles of concern. Now the Senate is considering a bill with strong bipartisan support that would give generics companies a more definitive legal leg to stand on; all of the prior court decisions and legal settlements have failed to clarify when REMS drug samples must be supplied.

Generics companies need those samples in order to perform the bioequivalency studies that are a first step in filing an abbreviated new drug application (ANDA). Even when generics companies obtain the samples and get ANDAs approved by the FDA, the brand-name company may refuse to negotiate a shared safety protocol, which prevents the generics company from selling its copy.

At a hearing in the Senate Judiciary Committee in March, Edith Ramirez, Chairperson of the Federal Trade Commission (FTC), said, “The FTC continues to be very concerned about potential abuses by branded pharmaceutical companies of REMS or other closed distribution systems to impede generic competition.” 1

The charges of generics companies have convinced a bipartisan group of senators to introduce legislation called the Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act of 2016.2 Senator Charles Grassley (R-Iowa), Chairman of the Judiciary Committee, says the bill provides for a faster remedy for generics companies than resorting to federal court, where the generics company would file an antitrust lawsuit. The bill, according to Senator Grassley, offers “a faster, less complex avenue by which to seek limited relief—primarily injunctive relief—to get lower-cost, safe generic drugs on the market as soon as possible.”1

The bill has overwhelming support on the committee from both Democrats and Republicans, with only Senator Orrin Hatch (R-Utah) voicing concerns about some of the provisions. His concerns are parallel to those of the brand-name drug industry.

Congress required the FDA to establish the REMS program via a provision in a 2007 FDA reauthorization bill.3 The agency attaches REMS to new drugs, as the price of approval, when one is “necessary to ensure that the benefits of the drug outweigh the risks of the drug.” The FDA may require that a drug’s REMS include “elements to assure safe use” (ETASU) because of the drug’s inherent toxicity or potential harmfulness.

The problem arises when a company’s ETASU employs a closed distribution system, generally through a specialty pharmacy, which only releases the drug to parties that have the required safe handling and other procedures in place. If a generics company gets hold of the REMS drug, submits an ANDA, and the FDA approves it, the company must then convince the brand-name patent holder to negotiate a shared safety agreement involving restricted distribution. Absent that agreement, the generics company cannot sell the product.

The brand-name industry has a number of problems with the bill. First, according to Peter Safir, Senior Counsel at Covington & Burling LLP, who appeared before the Senate Judiciary Committee on June 21 on behalf of the Pharmaceutical Research and Manufacturers of America, the bill allows the FDA to provide the generics company with an “authorization” to sue the brand-name company if the innovator company refuses to sell samples. The generics company would have to present evidence to the FDA that its testing protocols are “comparable” to those used by the brand-name company. Safir argued that “comparable” is not “equivalent,” and that the difference could be crucial. “This standard creates the distinct possibility that an eligible product developer will adopt less rigorous safety protections than the REMS with ETASU that was implemented by the innovator following careful discussions with and review by FDA,” Safir said.4

At those hearings, Beth Zelnick Kaufman, Assistant General Counsel for Amneal Pharmaceuticals, carried the ball for the Generic Pharmaceutical Association. In December 2013, Amneal initially requested samples of one product subject to a REMS in order to conduct the required bioequivalence testing. Though it took nearly three years, a supply agreement was finally signed in February 2016. However, four months later, Amneal still did not have product samples because the brand’s staff would not export it to Amneal’s location.

Amneal’s experience tracks those of Apotex, Inc., and Roxane Lab oratories—companies that were the targets of a preemptive lawsuit filed in 2011 by Actelion, which declined to provide samples of its brand-name Tracleer (bosentan), which is covered by a REMS. In 2008, Lannett Co. accused Celgene Corp. of violating the Sherman Act by refusing to sell it its cancer medication Thalomid (thalidomide). Neither case provided clear judicial language.

The Senate has passed bills similar to the CREATES Act in prior years. But the House has refused to do the same. Even if the House changes its tune, time is very short this year for a bill such as this to pass Congress. It is likely that the confusion will continue, and the barrier to generic introduction of REMS drugs will remain.

Author bio: 
Mr. Barlas is a freelance writer in Washington, D.C., who covers issues inside the Beltway. Send ideas for topics and your comments to sbarlas@verizon.net.

References

  1. Grassley C. Grassley statement at a judiciary committee hearing on anti-competitive tactics by prescription drug companies. Chuck Grassley website. June 212016;Available at: www.grassley.senate.gov/news/news-releases/grassley-statement-judiciary-committee-hearing-anti-competitive-tactics. Accessed August 8, 2016.
  2. Leahy PJ, Grassley C, Klobuchar A, et al. S. 3056–Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act of 2016 June 14 2016. Available at: www.congress.gov/bill/114th-congress/senate-bill/3056/text. Accessed August 8, 2016.
  3. Dingell JD, Barton J, PalloneFJrH.R. 3580–Food and Drug Administration Amendments Act of 2017 September 27, 2007. Available at: www.congress.gov/bill/110th-congress/house-bill/3580/text. Accessed August 8, 2016.
  4. Safir P. Written testimony of Peter Safir, Senior Counsel, Covington & Burling LLP, U.S. Senate Committee on the Judiciary, Subcommittee on Antitrust, Competition Policy, and Consumer Rights Hearing on the CREATES Act of 2016 (S. 3056). United States Senate Committee on the Judiciary. June 212016;Available at: www.judiciary.senate.gov/imo/media/doc/06-21-16%20Safir%20Testimony.pdf. Accessed August 8, 2016.