Brand name drug companies use many tactics to prevent generic competition from hitting the market, according to Erin Fox, PharmD, director of Drug Information at University of Utah Health in Salt Lake City.
Ms. Fox recently shared four ways drugmakers prevent generic competition — and keep drug prices high — in an article for Harvard Business Review.
1. Pay for delay. In pay-for-delay agreements, a brand name drug company pays a generic drugmaker to keep its medications off the market. These agreements add $3.5 billion in additional drug costs for consumers and taxpayers annually, according to the Federal Trade Commission.
2. Citizen petitions. Citizen petitions allow members of the general public to ask the agency to refrain from approving a generic drug or biosimilar over potential health concerns. However, the FDA said most petitions they receive do not raise valid scientific concerns and believes they are filed by drug companies to delay approval of competing medicines. Branded drug manufacturers submitted 92 percent of all citizen petitions filed between 2011 and 2015, according to FDA data cited by Ms. Fox.
3. Authorized generics. A drug company can sell the same version of its branded drug under a generic name as an "authorized generic." The first drug company to market a new drug is lawfully entitled to a 180-day exclusivity period to sell the drug before other generic versions can enter the market. There are no rules prohibiting brand name companies from developing an authorized generic for one of their brand name medications, thereby extending its monopoly on the market for another six months, according to Ms. Fox.
4. Sample access. Before earning approval for a generic product, drugmakers must prove the generic is bioequivalent to the brand name drug through testing. Often, drug companies will restrict access to their brand name drug samples so generic drugmakers cannot conduct necessary testing, said Ms. Fox.
5. FDA requirements. The FDA's Risk Evaluation and Mitigation Strategies program is intended to provide access to patients who will benefit from the medication and prevent access to patients who won't benefit or could be seriously harmed from the drug. Instead of using these rules to promote patient safety, brand name drugmakers often cite the requirements when refusing to sell their drug samples to generic drugmakers, according to Ms. Fox.
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