posted by AHIP
on July 14, 2017
First there are brand name drugs, then generics. First there are biologics, then biosimilars. The prescription drug market is built on this balance of a brand drug or biologic with time-limited market exclusivity, then the introduction of competition from generics or biosimilars, respectively. A drug manufacturer spends time developing therapies, conducting clinical trials, and shepherding a drug through the FDA approval process. The manufacturer’s reward is exclusive rights to sell a drug for a set number of years.
Typically, at the end of a drug’s exclusivity period additional manufacturers seek approval of a generic or biosimilar version of the original product. At this point, multiple generic or biosimilar versions of the original product enter the market and compete for market share, mainly, by offering significantly lower prices. This has been the paradigm for drug developers since the Hatch-Waxman Act (1984) for traditional pharmaceutical drugs and the Biologics Price Competition and Innovation Act (2010) for biologics.
Certain brand drugmakers are throwing a wrench into this process and delaying competition from generic and biosimilar drugs. This is happening in a number of ways, at least two of which involve repurposing rules designed to ensure patient safety in order to protect brand manufacturer profits. First, some brand drug manufacturers use safety protocols called Risk Evaluation and Mitigation Strategies (REMS) to deny generic drugmakers access to brand drug samples. Other brand drug manufacturers develop restricted distribution arrangements that similarly limit, and possibly prevent, generic developers’ access to product samples.
To be approved for human use, the FDA requires a generic or biosimilar drug to be thoroughly tested and found equivalent to the brand-name or reference biologic. If a generic manufacturer cannot obtain samples of the original product, then it cannot test its version against the original product. Thus, a generic company is essentially prevented from developing its generic or biosimilar version and bringing it to market.
Second, some brand drug manufacturers are preventing generic manufacturers from successfully reaching an agreement with them on developing a common REMS safety protocol. A shared REMS program (except in rare circumstances) is a prerequisite to a generic drug receiving FDA approval.
The behavior of such brand drug manufacturers is disrupting this balance between a brand drug’s patent-protected exclusivity and the entrance of generic competitors. When generic or biosimilar drugs’ FDA approval is delayed:
This last point is of particular concern given the high cost of many biologic drugs.