US government targets drugmaker ‘shenanigans’ over generics

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Trump administration officials, seeking ways to lower drug costs, are targeting pharmaceutical companies that refuse to provide samples of their products to generic drug companies, making it impossible to create inexpensive generic copies of a brand-name medicine.

The New York Times quotes Dr Scott Gottlieb, the commissioner of the US Food and Drug Administration, as saying recently that drug makers must “end the shenanigans” that prevent competing products from reaching the market.

Generic drug developers need samples of brand-name drugs to show that a generic copy is equivalent to the original. The manoeuvres by brand-name drug firms, Gottlieb said, “frustrate the ability of generic firms to purchase the doses of a branded drug that they need to run their studies.”

The report says the Federal Trade Commission is investigating the practice, which it says can forestall generic competition and “potentially preserve a brand firm’s monopoly indefinitely.” Federal officials said they were focusing on the anticompetitive practices of brand-name drug makers under the impetus of a vow by President Trump to hold down prices set by drug companies, which he has said are “getting away with murder.”

Under the Bill, a generic drug developer could file a lawsuit, and a federal court could require a brand-name drug maker to provide samples of its product to a generic company “on commercially reasonable, market-based terms.” The court could also award damages if it found that a drug maker had refused to sell samples “without a legitimate business justification.”

Brand-name drug companies make several arguments against the legislation, the report says. First, they say, it is not needed. The FDA approved 1,027 generic drugs last year, a record number, and nearly 90% of prescriptions are filled with generic medicines, suggesting that generic manufacturers have generally been able to obtain the samples they need, the brand-name companies say.

Second, they say, the Bill would be a boon to trial lawyers, giving them an incentive to sue brand-name pharmaceutical companies for damages, which could be worth more than sales of the proposed generic drug. Finally, they say, the legislation could endanger patients because generic drug developers might not follow the strict safety protocols that the government requires for some brand-name drugs.

But the report quotes the FDA as saying that “no additional requirements are needed to protect patient safety” in tests to show the equivalence of generic and brand-name drugs. The “testing typically involves a relatively small number of human subjects and a small number of doses and therefore a relatively low level of risk,” the agency said. At a time when researchers are using sophisticated science to develop new treatments and cures, the fight over physical samples – a few thousand pills – sounds mundane. But it has huge implications for consumers’ access to affordable medicines.

The FDA says it has received more than 150 inquiries from generic drug companies unable to obtain the samples needed to show that a generic product works the same as a brand-name medicine. Some of the disputes over samples involve drugs that are costly to patients and to the Medicare programme and that have experienced sharp price increases in recent years. “Without generic competition, there is no pressure to drive down the costs of these medications,” the food and drug agency said. Under current law, it said, it cannot compel a brand-name drug manufacturer to sell samples to a generic company.

The Congressional Budget Office estimates that the legislation would save the federal government $3.8bn over 10 years, mainly because Medicare, Medicaid and other health programmes would spend less on prescription drugs. Savings for consumers and private health insurance plans could be much greater, the report says.

Lawmakers of both parties pushed for the legislation to be included in a far-reaching budget bill signed by Trump in February, but it was dropped at the last minute. Even without action by Congress, generic drug companies say the denial of drug samples needed for testing may violate federal antitrust law because it tends to perpetuate a monopoly for the makers of some brand-name medications. But it typically takes years for courts to resolve such claims.

Mylan, a generic drug company, wants to obtain samples to develop a generic version of Revlimid, a brand-name cancer medicine sold by Celgene. At a court hearing in Newark in December, Jonathan M Jacobson, a lawyer for Mylan, told a federal district judge that “Revlimid costs patients who are dying $20,000 a month.” “These are some of the most ill patients in the world,” he said, and “if there were generics on the market, the price would be much lower, and people would live longer.”

Celgene said in court papers that it had no obligation to help a potential competitor and that it had “valid business justifications for declining to sell samples on the terms demanded by Mylan.” Moreover, Celgene said its overriding concern was for the safety of patients. But Mylan, the generic drug company, said this was no excuse because it had devised safety protocols similar to those followed by Celgene.

The secretary of health and human services, Alex M Azar II, has repeatedly said that drug prices are too high. The administration, he said, will soon roll out “a whole slate” of proposals to reduce those prices.

The report says Azar has suggested that private companies – pharmacy benefit managers – should have a role in negotiating prices for drugs under Part B of Medicare. Those drugs are typically administered by infusion or injection in doctor’s offices and hospital outpatient departments.

The New York Times report

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