Transparency an Important Step in Ending the Shenanigans | Association for Accessible Medicines
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Transparency an Important Step in Ending the Shenanigans

Congress Signals Intention to Pass Legislation Needed to End Games

WASHINGTON DC (May 17, 2018) – Today, the Food and Drug Administration (FDA) for the first time publicly identified brand-name pharmaceutical companies who abuse FDA’s safety programs or erect their own restricted distribution systems without an FDA mandate to delay competition from generic and biosimilar manufacturers. These anti-competitive tactics artificially extend the monopolies on blockbuster brand drugs and keep drug prices high for millions of patients.

“President Trump, Secretary Azar and Commissioner Gottlieb promised to take immediate action to increase competition and combat brand-name drug companies’ abuse of FDA’s safety rules. Publicly listing the bad actors who have, for years, denied access to samples reveals which companies are putting profits ahead of patients,” says Association for Accessible Medicines (AAM) President and CEO Chip Davis.

Although this is the first time a complete list has been released by the FDA, the information it contains reveals for the American public what generic and biosimilar companies have long known: This is a widespread and pervasive problem. Abuse of FDA’s safety programs imposes substantial costs on patients and the health care system. A 2014 study from Matrix Global Advisors, and commissioned by AAM, concludes that abuse of FDA’s safety programs increases pharmaceutical costs by $5.4 billion annually.

Importantly, the newly released list also exposes the extent to which brand companies are needlessly erecting their own restricted distribution systems even when FDA has not required them to do so. The list contains 52 products for which generics have been forced to seek help from FDA even though there was no REMS with ETASU impacting the distribution. This is consistent with a 2017 finding by Matrix Global Advisors that identified 74 products for which there is limited distribution, 33 of which do not have a REMS with ETASU, and a total market value of more than $22 billion.

Recent remarks from Secretary Azar and Commissioner Gottlieb highlight the importance of combatting these abuses:

“It’s time to shed light on these practices and call out the manufacturers who may be abusing the rules that built our free market for drugs. They’re using laws intended to promote the public health to pad their profits instead.”

-Secretary Alex M. Azar, May 14, 2018

 

“I consider these tactics unfair and exploitative practices, and they’re in direct conflict with our broader public health goals.”

-Commissioner Scott Gottlieb, November 8, 2017


In President Trump’s speech last Friday at the White House, he made clear the essential role that generic and biosimilar medicines play in containing prescription drug costs for patients. Understanding his ambitious agenda on drug pricing requires legislative action, the president stated his “[administration] will work with Congress to pass legislation that will save Americans even more money at the pharmacy. For that, we need the help of Congress.”

Legislation currently before Congress would end brand-name drug company abuses of FDA’s safety programs once and for all. The bipartisan Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act (S. 974/H.R. 2212) addresses the most common abuses of FDA’s safety programs, establishing a clear process of access to samples and a limited legal pathway for instances when a brand-name pharmaceutical company has continued to unjustifiably deny the purchase of samples.

Davis adds, “Pharma companies are inured to shaming. To end the shenanigans once and for all, Congress must pass the bipartisan, market-based CREATES Act. Increasing patient access to more generics and biosimilars is a proven solution to lowering the cost of prescription drugs. We look forward to working with the Trump administration and leaders in Congress to enact the CREATES Act into law and deliver a win for America’s patients. We’re encouraged by Speaker Ryan’s statement today that the House is working to pass the CREATES Act. It’s important that Congress gets this right: Any compromise must ensure the timely approval by FDA of safe, effective and more affordable versions of pricey brand medicines. Any compromise must also provide strong enough enforcement to deter bad actors from gaming the rules that were never intended to be used to protect their monopoly at the expense of patients.”
 

Additional Background

AAM Comments to the FDA on Hatch-Waxman (November 17, 2017)

  • In comments submitted to the FDA as part of the July 18, 2017 public meeting, AAM recommended:

FDA Should Increase Transparency and Efficiency of the Sample Request Process
“… Publishing such a list may increase public pressure on brand companies to supply RLD samples and would help the antitrust agencies and private litigants develop a factual record of brand companies’ intransigence in the event litigation becomes necessary. Although the list will not fully alleviate the problem of REMS abuse, it would be an effective prong in a multi-faceted approach to combatting REMS abuse.” [Page 28]

CREATES Act (S. 974/H.R. 2212)

  • Senators Patrick Leahy (D-VT) and Chuck Grassley (R-IA) Op-ed in STAT, “It’s time to empower generic drug makers to bring down prices” (March 16, 2018)
  • Senators Chuck Grassley (R-IA), Patrick Leahy (D-VT), Mike Lee (R-UT), Amy Klobuchar (D-MN) letter to FDA re: need for Congressional to pass the CREATES Act (July 20, 2017)
  • Congressional Budget Office estimates savings of $3.8 billion (2018-2027)
  • Broad, politically diverse coalition of 68 organizations support the CREATES Act
  • Recent polls show that 84 percent of Americans support the CREATES Act

FDA’s Drug Competition Action Plan

  • June 21, 2017. Gottlieb announcement of public meeting. “We know that sometimes our regulatory rules might be ‘gamed’ in ways that may delay generic drug approvals beyond the time frame the law intended, in order to reduce competition.”
  • November 8, 2017. Gottlieb speech to the FTC. “So my message is this: end the shenanigans.”

Federal Trade Commission

  • In testimony before Congress on July 27, 2017, the FTC commented: “The Commission supports the goals of the CREATES Act to protect the competitive process by eliminating incentives and opportunities for branded manufacturers to engage in manipulation of the REMS process to delay generic entry.”

CONTACT:
Rachel Schwartz
202.249.7147 (o)
202.251.8881 (c)

Association for Accessible Medicines

202.249.7100

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