Jilting generics: Part 1 of an exclusive interview with GPhA CEO Ralph Neas
The first of a two-part interview with Generic Pharmaceutical Association president and CEO Ralph Neas
When the FDA initiated Risk Evaluation and Mitigation Strategy (REMS) programs in 2007, the goal was to encourage physicians and patients to use drugs safely. Attaching a REMS requirement to a drug unlikely to receive approval allows the FDA to green light treatments that come with safety concerns, yet may still benefit patients. In addition, many of the REMS programs -- including education programs, access programs, and prescription dispensing restrictions -- are beneficial for the industry at large.
However, abusing REMS in order to subvert competition in the pharmaceutical marketplace has become an increasingly popular tactic over the last year. REMS systems have been used to keep generic competitors out. One strategy has been for brand-name manufacturers to use REMS as an excuse not to supply samples to generic drug companies, thereby preventing the companies from creating generic drug versions and demonstrating bioequivalence.
These shoddy practices’ implications are far-reaching. They costs billions per year in potential savings -- a burden that Ralph Neas, president and CEO of the Generic Pharmaceutical Association (GPhA), says could be eliminated if REMS were interpreted and used in accordance with Congress’ and the FDA’s original intentions.
Note: This interview has been lightly edited for clarity and brevity.
BioPharma Dive: When did unfair application of REMS to squeeze out generic competition become a problem?
Ralph Neas: Shortly after Congress passed the Food and Drug Administration Amendments Act (FDAAA), the legislation authorizing the creation of REMS, in 2007, there were several cases of companies using REMS protocols to delay generic competition. The issue has continued to be a problem since 2008, 2009. The opportunity for misuse is widely available, because FDA requires REMS programs for almost 40% of new drug approvals.
BD: How widespread is the problem of brand-name drug manufacturers not being willing to share their product information with generic drug manufacturers?
RN: Many generic manufacturers are having difficulty obtaining samples for bioequivalence testing. The Matrix Global Advisors study includes 40 generic small-molecule products whose market entry, according to a survey of generic drug manufacturers, is currently delayed by misuse of REMS or other restricted access programs.
For those 40 products -- the report found that $5.4 billion in annual pharmaceutical spending could be saved if generic versions of those 40 drugs were allowed to come to market. It is important to note that not every brand company engages in this practice. Unfortunately, however, there are some companies that have adopted this as a strategy as part of their approach to life-cycle management, using REMS to extend the monopolistic life of their products.
BD: What are the economic implications?
RN: REMS is not just an issue for generic manufacturers. The economic impact is especially hard on consumers paying out-of-pocket, as well as private insurance companies and state and federal governments. […]
The Matrix Global Advisors Report, which we commissioned, breaks down who bears the burden of this unnecessary spending. We know, for example, that the federal government shoulders $1.8 billion in additional costs, while private insurance companies lose $2.4 billion and consumers pay $960 million in extra out-of-pocket costs. Add to that the $240 million that state and local governments lose, it’s clear that this burden is shared by many stakeholders.
In the second part of BioPharma Dive’s discussion with Ralph Neas, the GPhA president explains what changes he would like to see to REMS programs, and what Congress can do about it.