FDA, FTC Promise United Effort to Fight Expensive Drugs 

Photo by Simon Dawson (Bloomberg)

Getting generic drugs to market faster is one of the best ways to combat high prices, along with policing the industry for anticompetitive behavior, the heads of the Food and Drug Administration and the Federal Trade Commission said Nov. 8.

FDA Commissioner Scott Gottlieb said at an FTC-sponsored conference that his agency is rolling out several messages to brand drugmakers to smooth generic drug development. The FDA also issued a draft guidance on how drugmakers can share risk management systems to ensure safe use of prescriptions.

Gottlieb warned that his agency is on the lookout for brand drugmakers that deliberately slow collaboration on risk strategies to delay generics from coming to market.

Acting FTC Chairman Maureen Ohlhausen said her agency will vigorously watch for unfair practices among drugmakers, but she cautioned that antitrust enforcement is “not a panacea” for all problems in the pharmaceutical industry. The FTC is currently charging generic drugmaker Impax Laboratories Inc. for allegedly accepting more than $100 million to delay its release of a generic version of an opioid pain medication. The brand drugmaker in that exchange, Endo Pharmaceuticals Inc., settled with the FTC in January.

Agencies with the authority to crack down on abuses by pharmaceutical companies have faced pressure from Congress to better confront high prices. Lawmakers have grilled Mylan NV about its 400 percent increase in the wholesale price of its allergy shot EpiPen over nine years. Turing Pharmaceuticals’
former chief executive officer Martin Shkreli has also come under fire for rapid prescription price increases.

FDA Is Watching

Rapid entry of generic drugs into the market is an important driver of lower pharmaceutical prices. The first generic version of a branded drug is typically offered 20 percent to 30 percent lower than the price charged for the branded product, Ohlhausen said.

Tactics used by brand drug companies to block generic companies from producing cheaper versions are “unfair and exploitative,” Gottlieb said. The FDA will be contacting pharmaceutical supply chains in the coming weeks to inform them that the government wants generic drugmakers to have access to the dosages they need to run studies.

Brand drug companies in the past have restricted generic companies from getting samples of their drugs to develop cheaper ones. “I want them to know that they’re challenging a broader public health goal,” Gottlieb said.

According to an academic paper by Rutgers Law School professor Michael A. Carrier, “More than 100 generic firms have complained that they have not been able to access needed samples.

One study of 40 drugs subject to restricted access programs found that generics’ inability to enter cost more than $5 billion a year.”

The FDA also wants to make it easier for brand drug companies and generic drugmakers to develop a common file for the implementation of risk evaluation and mitigation strategy, or REMS. Manufacturers require REMS to ensure that the benefits of a drug outweigh its risks.

Brand and generic drugmakers should share REMS systems to reduce burdens on the health system, Gottlieb said. When brand drugmakers drag out these negotiations, it’s a way to forestall generic entry, he said.

The FDA is also streamlining its reviews of generic drug applications with the goal of reducing wait times to eight months for priority drugs, down from as much as 22 months, he said.

Competitive Harms

“Antitrust enforcement is not a cure-all that can fix all potential problems in this space. Just as there is no single drug to cure every illness, the antitrust laws are not a panacea for every economic concern,” Ohlhausen said.

“We have likely not seen the last of pay-for-delay deals, sham petitioning, or problematic proposed mergers in this space,” Ohlhausen said. “I fully expect that competition issues involving patented pharmaceuticals will remain a significant focus of the agency’s enforcement efforts in the years ahead.”

She touted the agency’s work challenging anticompetitive hospital mergers, investigating illegal pay-for-delay agreements, and demanding divestitures that preserve competition in “dozens” of pharma deals.

She said the FTC is devoted to protecting markets that develop and produce “life-saving medicines.”

“Antitrust works best when it focuses its attention on harms to the competitive process and to the protection of consumer welfare,” she said.

—with assistance from Eleanor Tyler