Generic drugmakers with U.S. manufacturing facilities could see increased government contracting opportunities after a recent decision from the U.S. Court of Federal Claims.
The decision found Acetris Health LLC’s hepatitis B drug entecavir is a “U.S.-made end product” eligible for the Department of Veterans Affairs to purchase under the Buy American Act. It upended a previous VA interpretation that generic drug products manufactured in the U.S. containing active pharmaceutical ingredients (APIs) sourced from foreign countries weren’t eligible for government purchase under the Trade Agreements Act (TAA) even if the product otherwise qualified as a domestic product under the Buy American Act.
Judge Margaret M. Sweeney said Acetris’ entecavir tablets that contained APIs sourced from India were a U.S.-made end product eligible for VA purchase, not an ineligible product of India.
The generic drug industry—which includes companies like Teva Pharmaceutical Industries Ltd., Sun Pharmaceutical Industries Ltd., Mylan Inc., and Novartis AG’s Sandoz Inc. unit—obtains a significant percentage of imported pharmaceutical chemicals for generic drugs finished in the U.S. from countries like India and China.
The court decision interpreted the interplay of how the TAA, enacted in 1979, overlaps with the 1933 Buy American Act, which requires the U.S. government to prefer U.S.-made products in its purchases. The TAA provides exceptions to the Buy American Act by allowing the president to identify designated countries that can also provide goods sold to agencies.
And the decision applies not just to single award government contracts but also to generic drug companies’ ability to offer products on the Federal Supply Schedule (FSS) contracts, Donna Lee Yesner, senior counsel at Morgan Lewis & Bockius LLP in Washington, told Bloomberg Law. The FSS is the primary vehicle through which the federal government buys drugs. The VA wasn’t adding generic drugs to the FSS if the API came from India or China even if they qualified as domestic products, Yesner said.
Morgan Lewis represented Acetris, a subsidiary of Rising Pharmaceuticals, in the litigation.
Read my article on our enhanced news site.
Stay on top of new developments in health law and regulation, and learn more, by signing up for a free trial to Bloomberg Law.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)