The shaming begins. As promised, the FDA called out drug companies by name Thursday for not playing fair.
In the 21st century version of pillorying, the agency posted a list of innovators that allegedly have made it difficult for would-be competitors to get the drug samples necessary to develop generics. The list encompasses 35 drug companies, 51 reference list drugs (RLDs) and 160 inquiries from generic developers. More are sure to be added in the future, as the agency plans to update the list twice a year. (See FDA list of RLD access complaints.)
The list of shame is part of the Trump administration's effort to bring down drug prices by addressing and improving transparency about various gaming tactics brand companies use to delay generic competition.
The "FDA has received numerous inquiries from prospective generic applicants indicating that they would like to develop a generic version of a marketed drug, but are unable to obtain the necessary samples," FDA Commissioner Scott Gottlieb said in releasing the list.
In many cases, the innovators used their risk evaluation and mitigation strategies (REMS) with elements to assure safe use (ETASU) as an excuse not to sell generic drug developers the samples needed for bioequivalency studies. In other instances, REMS were used to levy difficult or impossible conditions on the sale of the samples, Gottlieb said.
REMS weren't to blame for all the inquiries the FDA received about access issues. More than half of the RLDs on the list have no REMS, but innovators may have imposed contractual clauses on distributors, wholesalers or specialty pharmacies that prevented them from selling samples to would-be competitors.
The list shows such shenanigans, as Gottlieb has called them, are not limited to outliers in the biopharma industry. They appear to be a common practice among some of the household names in the industry, including Astrazeneca plc, Bayer AG, Boehringer Ingelheim GmbH, Glaxosmithkline plc, Novartis AG, Pfizer Inc., Shire plc and Teva Pharmaceutical Industries Ltd. (See BioWorld, Nov. 9, 2017.)
Access to RLD samples is a big factor in determining which generics or biosimilars a company develops, as its only recourse when denied a reference drug is to go to court or move on to a different drug. "We can't afford to litigate for three years to purchase samples at a fair market value and then start development three years from now," Bruce Leicher, senior vice president and general counsel for Momenta Pharmaceuticals Inc., told a House subcommittee last year. (See BioWorld Today, March 24, 2017.)
Not a one-off practice
Making it challenging to get the 1,500 to 5,000 units generally needed for generic development apparently is not a one-off practice for some of the companies on the FDA's list. For instance, Celgene Corp., of Summit, N.J., is being paraded through the public square for multiple inquiries filed about its multiple myeloma drugs Pomalyst (pomalidomide), Revlimid (lenalidomide) and Thalomid (thalidomide), all of which have REMS with ETASU due to teratogenicity risks.
Over the years, the FDA has received eight inquiries about Pomalyst, 13 about Revlimid and 10 about Thalomid. In response, the agency has sent Celgene four safety determination letters on Revlimid indicating that a generic developer's protocol would not violate the REMS and two on Thalomid.
The list marked the second time Revlimid, which generated nearly $8.2 billion in sales last year, was in the crosshairs this week. Health and Human Services Secretary Alex Azar referred to it indirectly Monday in a briefing on the administration's plan to bring down drug prices, calling it out for its 20 percent price increase over the past year. (See BioWorld, May 15, 2018.)
Analysts that cover Celgene shrugged off the shaming, pointing out that Revlimid generics are in the works. "While Celgene may be putting up an understandably high barrier, we believe generic companies willing to put in the appropriate safeguards have already been able to obtain Revlimid to conduct bioequivalence studies," RBC Capital Markets analyst Brian Abrahams said.
Citing the liability Celgene faces, companies looking to develop generics of Revlimid or combination products including it must comply with the REMS and ensure legal protection, Abrahams added.
When it comes to using restricted distribution systems to delay competition, Novartis AG, of Basel, Switzerland, is potentially one of the biggest offenders. According to the list, the FDA has received inquiries about access problems for four Novartis drugs, none of which has a REMS. The agency received six inquiries about Exjade (deferasirox), three concerning Tasigna (nilotinib hydrochloride monohydrate) and one each about Afinitor (everolimus) and Zortress (everolimus).
Meanwhile, some companies are questioning why they're on the list. One of those is Stockholm-based Swedish Orphan Biovitrum AB (Sobi), which is shown as having two inquiries about access issues with Orfadin (nitisinone). "We continue to coordinate with generic and other companies on every request for product that we receive," a Sobi spokesperson told BioWorld, adding that the company has provided Orfadin samples to generic developers and other competitors. And just last year, the FDA approved Cycle Pharmaceuticals' tablet formulation of nitisinone.
Being on the list doesn't seem to be affecting companies' bottom lines. "Other than creating negative optics for these companies, we see minimal impact such a list will have on actual generic risk," Abrahams noted.
Mizuho Securities USA LLC analyst Salim Syed agreed, saying, "We believe this is more modest headline risk than actual business risk."
However, the negative optics have at least one lawmaker calling for action. "More transparency, by FDA and others, is helpful to spotlight the abusive and anticompetitive tactics that we know some brand name drug companies use to block competition. Understanding the problem is the first step, but acting on it is the vital next step," Sen. Patrick Leahy (D-Vt.) said Thursday.
"With billions of dollars at stake, a database alone will not stop this behavior. Nor can years of litigation through antitrust suits," he continued, as he urged Congress to finally pass the bipartisan Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act, which is sitting in both the House and Senate after being reintroduced more than a year ago. (See BioWorld, July 31, 2017.)
CREATES would enable competitors to turn to the courts to seek injunctive relief if an innovator denies them access to samples of a reference product needed to develop a generic or biosimilar. As a deterrent, the court also could award damages.