If you have a successful product, should you be forced to sell samples directly to a competitor so they can make a copycat version of the product?
I ask because that’s the crux of an issue outlined in an article that ran this week in The New York Times. It explains that brand-name drug makers are refusing to sell their products to generic companies, who need to analyze the drugs so they can create copycat versions. Traditionally, the generic drug makers purchased samples from wholesalers. However, due to growing safety concerns, an increasing number of drugs are sold with restrictions on who can buy them, which forces the generic manufacturers to ask the brand-name companies for samples. When they do, some claim the brand-name firms refuse to sell them samples.
The issue has its roots in a 2007 law—called The Food and Drug Administration Amendments Act of 2007—which gave FDA the authority to require a Risk Evaluation and Mitigation Strategy (REMS) from manufacturers of drugs with serious side effects or the potential for abuse to ensure that the benefits of a drug or biological product outweigh its risks. In many cases, those programs simply direct the company to educate doctors or patients about risks. But in other cases, they require that distribution be limited to approved pharmacists and health care providers. And there’s the rub.
So on the one hand, the law said the programs shouldn’t be used to block development of generic drugs but brand-name companies said the language was vague, and began restricting access to drug samples soon after the law was passed. Their reasoning is that it isn’t clear under the applicable laws and regulations that they are permitted to sell certain drugs to any person or entity without a prescription.
Advocates for generic drugs say the practice could limit access to the low-cost drugs, which they say have saved more than a trillion dollars over the last decade, according to the NYT article. Other advocates say it’s just the latest tactic drug makers are using to block generic rivals as long as possible.
“We definitely see this as a significant threat to competition,” said Markus Meier, who oversees the Federal Trade Commission’s health care competition team, in the NYT article.
Brand-name manufacturers also sometimes limit access to drugs even when the government doesn’t require it. In a federal lawsuit filed April 1 in Florida, Accord Healthcare, an Indian generics manufacturer, said the drug company Acorda refused to turn over samples of its multiple sclerosis drug Ampyra, even though there are no restrictions on its distribution.
In a letter to Accord from Acorda that was submitted to the U.S. District Court for the Southern District of Florida, in Fort Lauderdale, Acorda echoed some other companies’ positions, and said it was under no obligation to sell its products to another manufacturer.
Representative Henry A. Waxman, Dem CA, said Congress needs to remove the loophole that allows branded drug makers to deny generic manufacturers access to their products. The purpose of these post-market safety plans was to protect consumers from risky drugs, not to allow brand companies to thwart generic competition, says Waxman in the NYT article. Incidentally, Rep. Waxman co-wrote the landmark law in 1984 expanding access to generic drugs.
Don’t get me wrong, when it comes time to purchase a prescription, I’m just as in favor of using a substantially cheaper generic substitute as anybody else. Nevertheless, I wouldn’t say that adhering to a strict reading of the law is necessarily a stalling tactic. What’s more, the larger issue seems to concern a company’s right to choose for itself with whom to deal and to whom it should supply its products. If the law, as it currently stands, enables companies to refuse to conduct business with others, then there doesn’t seem to be much that can be done—unless Congress or regulators step in.
It is a thorny situation, and I do see both sides. What are your thoughts?