Health Law Daily FTC says drug naming guidance, misuse of REMS may impede competition
News
Wednesday, July 18, 2018

FTC says drug naming guidance, misuse of REMS may impede competition

By Elizabeth M. Dries, J.D.

The Federal Trade Commission (FTC) submitted comments regarding HHS’s Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs (Blueprint) focusing on two areas identified in the Blueprint: (1) combatting abuse of Risk Evaluation and Mitigation Strategies (REMS); and (2) spurring biologics competition. According to the Blueprint, HHS seeks to increase competition and end the gaming of the regulatory process that may keep drug prices artificially inflated or hinder generic, branded or biosimilar competition. Health care competition has been a FTC priority for many years because of its critical importance to consumers and the economy. Both combatting abuse of REMs and spurring biologics competition are of particular interest as they significantly affect U.S. health care expenditures.

Misuse of REMS may impede competition. REMS are strategies intended to manage the known or potential safety risks associated with the use or distribution of certain pharmaceutical products. In some cases, implementation of REMS may involve restricting distribution of a pharmaceutical to ensure that its benefits outweigh its risks. When branded manufacturers misuse REMS to thwart entry by generic competitors they upset the balance between competition and innovation.

REMS abuse may occur in two ways: (1) branded manufacturers invoke REMS requirements improperly to justify a refusal to make sample available to firms seeking to obtain FDA approval of generic or biosimilar products; (2) branded manufacturers may improperly deny a competitor access to a single shared REMS system leaving the FDA unable to approve the competitor’s application and labeling.

The FTC supported the FDA’s efforts to bring clarity and transparency to the REMS issues including: (1) a recent release of a list identifying all drug products for which prospective generic competitors have reported an inability to obtain branded product samples, the brand manufacturer and the number of such reports; and (2) a 2014 draft guidance detailing how generic firms seeking to enter with generic versions of drugs covered by restricted distribution REMS may obtain letters validating that their safety protocols are comparable to the branded firm’s safety protocols.

The FTC supported the FDA’s efforts to clarify the circumstances under which it will grant waivers of the shared REMS requirement, as antitrust liability alone does not create proper incentives for branded and generic firms to reach agreement on a shared REMs program. In addition, the FTC suggested legislation to provide a clearer path for competing firms to establish separate FDA approved REMS programs.

Regulatory uncertainty of biologics. Biologics are used to treat serious medical conditions for which there is no other therapeutic alternative. Due to the high and growing cost of biologics, the FTC acknowledged that patients would benefit from increased competition between biologics and biosimilars. Market factors, however, limit biologic competition. The FTC recommends the FDA: (1) continue to create a pathway for expedited approval of interchangeable biologics; (2) reconsider the current naming guidance for biologics in light of the Blueprint; and (3) improve the Purple book.

The FTC found the lack of FDA guidance on interchangeable biosimilars a likely hindrance to automatic substitution and encouraged the FDA to incorporate ways to reduce barriers to entry and to expedite the approval of biosimilars and interchangeables into its final interchangeable and biosimilar guidances. In addition, the FTC suggested the FDA’s Naming Guidances may hinder biosimilar competition as the FDA’s decision to assign different suffixes to the drug substance names of biosimilars and their reference biologics could result in physicians incorrectly believing that biosimilars’ drug substances differ in a clinically meaningful way from their reference biologics' drug substances. Consequently, the FTC recommended that HHS and the FDA revisit the FDA Naming Guidance in light of the Blueprint and consider other approaches.

The FTC also supported the FDA’s efforts to improve the Purple Book, which lists biological products. The FTC suggested including a search functionality in the Purple Book, and a reorganization of information to increase its utility.

MainStory: TopStory NewsStory AgencyNews DrugNews FDCActNews DrugBiologicNews

Back to Top

Interested in submitting an article?

Submit your information to us today!

Learn More