Share and share alike? Not if it’s a REMS

By Ed Silverman ed.silverman@ubm.com

Here is a vexing question that more drug makers are likely to encounter as the FDA increasingly demands that new approvals come with a Risk Evaluation & Mitigation Strategy, or REMS. What should a brand-name drug maker do when an aspiring generic rival wants to negotiate the terms of a shared risk management program and the talks go nowhere?

Unless there is an undue burden, a 2007 law stipulates that the rival drug makers should work together on coordinating a shared REMS program. However, there is actually no guidance for navigating what can be a very complicated situation. After all, there are obvious competing interests in play and sticking points can easily emerge.

So, Prometheus Laboratories last spring filed a thought-provoking Citizen’s Petition with the FDA in hopes of gaining some clarity. The move was sparked by apparently fruitless negotiations with Roxane Laboratories, a unit of Boehringer Ingelheim that wants to sell a generic version of Lotronex, a treatment for irritable bowel syndrome that Prometheus has sold with a REMS program since 2010.

The petition raised several unanswered, but important questions about the extent to which rival drug makers must set aside competitive differences – despite the possibility of opposing legal positions concerning patent rights and product liability – in the name of establishing a uniform method for ensuring patient safety.

“Without any guidance, standards or clear expectations from the agency, sponsors must devote significantly more resources and time to developing negotiating single-shared REMS,” the petition stated. “This unnecessary use of resources and time benefits no one; not the patients, not the health care system, not the agency and certainly not the sponsors,” or drug makers.

The FDA, however, recently rejected the petition. Why? In its response, the agency noted that various efforts have been undertaken in the past to facilitate the process when a shared REMS program was being devised by other groups of drug makers. Other shared REMS programs have been negotiated for several other medicines, the FDA wrote, and “resolution of these issues did not prove unattainable for these parties.”

Some analysts were not surprised. Earlier this year, in fact, the FDA partly denied a 2009 Citizen’s Petition filed by Dr. Reddy’s Laboratories, which asked the agency to “establish procedures to facilitate the availability of generic versions of drug products subject to a (restricted distribution REMS) and enforce the FDC Act to prevent companies from using REMS to block or delay generic competition.”

“Overall, I think the agency will continue to address brand-generic REMS disputes on a case-by-case basis, rather than use this petition – or any of the other similar pending petitions – as an opportunity to provide any additional clarity on agency policy as it relates to brand and generic disputes over REMS,” says Michael McCaughan, a co-founder of the Prevision Policy consulting firm and editor of The RPM Report.

Nonetheless, the issue is likely to re-emerge. The FDA acknowledged to Prometheus that it is continuing to evaluate whether rulemaking or guidance would be useful. And in responding to Dr. Reddy’s, the agency indicated it would issue clarifying guidance on the procedures generic applicants can follow for conducting studies of products that were approved with a REMS that contains an ETASU provision. This presents an opportunity to review the issues that Prometheus raised. As far as Prometheus is concerned, the lack of guidance continues to pose several sizeable problems, some of which may be more subtle than others.

For instance, the Nestle division maintains that the FDA never properly defined a “single, shared REMS” system in the first place or provided parameters for determining which aspects of a REMS program should be shared by drug makers.

Prometheus also pointed out that there are no standards for granting waivers; no means for determining when a brand-name drug maker is using a REMS program to block or delay a generic rival from gaining FDA approval for its drug; no way to determine how costs and responsibilities, such as collecting adverse events, should be shared; and no insights for accommodating other generic drug makers that gain approvals.

The drug maker also pointed to another potentially troublesome issue – avoiding antitrust scrutiny from the U.S. Federal Trade Commission. How so? Prometheus believes that a brand-name drug maker may find itself simultaneously negotiating a shared REMS program and also embroiled in patent litigation with the same generic drug maker. Prometheus worries that any shared REMS agreement may be perceived as a so-called ‘reverse payment’ that benefits the generic drug maker.

In fact, just five weeks after Prometheus filed its petition, the U.S. Supreme Court ruled that drug makers can face lawsuits over so-called pay-to-delay, or reverse, patent settlements, although such deals should not necessarily be assumed to be illegal. Of course, Prometheus could not have known how the court would view the topic, but the issue was clearly on industry radar screens and a decision was expected.

The decision largely vindicated the position taken by the FTC, which has maintained the deals are anti-competitive because generic drug makers are given incentive to file lawsuits against brand-name rivals and then settle for a quick profit, rather than challenge a patent in court. The agency has argued consumers are prevented from obtaining lower-cost drugs sooner than they would otherwise and, consequently, this practice costs Americans about $3.5 billion annually.

To bolster its concerns that anti-trust questions could be raised, Prometheus noted that, of 65 drugs approved with a REMS program, 25 of these include what is known as an ETASU, or elements to ensure safe use component that spells out strict requirements for physicians and distributions. However, only six of these operate under a single, shared REMS system, and none were negotiated and adopted against a backdrop of patent litigation, the petition states.

At the same time, Prometheus hypothesizes that, if a brand-name drug maker and generic counterpart are unable to reach agreement on a shared REMS program, the brand-name drug maker could find itself accused of deliberately stalling talks in order to delay competition from a low-cost rival. And this is also framed as an antitrust risk.

Last year, in fact, such a scenario played out when several generic drug makers accused Reckitt Benckiser of unfairly trying to prevent them from gaining FDA approval to sell low-cost versions of Suboxone tablet for opioid dependence. In response to their assertions, the FDA subsequently referred their complaints to the FTC.

The decision was laden with irony, given that Reckitt Benckiser had filed a citizen’s petition to ask the FDA not to approve generics unless the risk of accidental pediatric exposure was addressed; child-resistant, unit-dose packaging was used, and not until establishing the drug maker withdrew Suboxone tablets due to safety issues. Instead of getting the FDA to take its side, however, Reckitt not only lost agency backing, but must now also contend with an FTC probe into its actions.

Of course, some situations are more contentious and convoluted than others. But Prometheus also posits that sorting out product liability concerns could also be quite daunting. Although brand-name drug makers can be held responsible for patient harm if their product labeling is not updated to reflect new safety information, generic drug makers cannot be held liable for patient harm if their label contains the same information that appears on the brand-name version.

However, a few states have allowed patients to sue brand-name drug makers who were harmed by the generic equivalent, prompting Prometheus to wonder “how this complicated liability analysis would be applied to generic products distributed as part of a shared REMS program.” Would both brand-name and generic drug makers be held liable if they participate in such a REMS program?

“It is unclear if any agreement reached between an innovator and a generic company as to the REMS will be subject to state court review in determining liability in a state tort failure-to-warn case,” the petition stated. “In the face of this uncertainty, FDA must provide guidance and standards around these issues before single, shared REMS are negotiated, as it is likely that REMS will be the subject of future litigation in failure-to-warn cases.”

Whether that comes to pass is uncertain, but Prometheus has identified numerous challenges for the agency and drug makers alike. And clearly, the Nestle unit is concerned about its impasse with Roxane, which explains the other request in its petition – the FDA should give brand-name drug makers notice when a generic counterpart has sought a waiver and a say in the waiver process.

But the FDA also denied the request to provide Prometheus notice. In explaining its decision, the agency noted that it may determine on its own whether a waiver for shared REMS is appropriate for a particular medicine, but that added information is always welcome. Meanwhile, the agency says Prometheus and Roxane have been invited to the agency to work things out. Prometheus declined to comment, but if the talks fail to yield an agreement, perhaps the agency will be prompted to issue guidance a little faster.

Posted: December 2013

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