Grassley, FDA Focus on Increasing Generic Drug Competition

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By Bronwyn Mixter

The Food and Drug Administration should expand generic drug access as a way to lower prescription drug prices, a key senator said.

Sen. Chuck Grassley (R-Iowa), chairman of the Senate Judiciary Committee, in a June 19 letter asked FDA Commissioner Scott Gottlieb to look at ideas in proposed legislation as the agency forms a plan to address high prescription drug prices.

Meanwhile, Gottlieb said in a June 21 blog post that his agency is working on an action plan to increase competition in the market for prescription drugs through the approval of lower-cost generics.

Gottlieb said as part of the action plan, the FDA will hold a public meeting July 18 on federal rules being used to thwart generic competition, and added the FDA will look at how it can coordinate with the Federal Trade Commission to identify and publicize practices that stifle competition.

Drugmakers are under heavy scrutiny by lawmakers, consumers, medical professionals, and the president for their pricing practices. The increased focus on drug prices was spurred by companies significantly hiking the prices of older pharmaceutical products that lacked competition.

Crucial First Step

David Balto, an antitrust lawyer in private practice and former policy director at the FTC, told Bloomberg BNA June 21 the FDA’s action plan “is a crucial first step. Regulation can be a tool to strengthen competition but it can also be abused to limit access to the market.”

The FDA’s regulations “can be a playbook for anticompetitive mischief and it is vital the FTC and FDA get on the same page to stop the ongoing regulatory abuse,” Balto said. “Consumers are paying outrageous prices because of this type of regulatory abuse.”

Balto said “the FDA is not a competition agency and the FTC is not a regulatory agency so it’s vital for the two of them to go and educate each other about how the regulatory process can be abused to deter competition.”

James M. Burns, an antitrust attorney in Baker Donelson’s Washington office, told Bloomberg BNA that Gottlieb’s “invitation to the FTC to assist the FDA in better understanding the ways in which the programs that the FDA administers can be used for anticompetitive purposes is a welcome development.”

“The FTC has developed considerable expertise on these issues over the years, which should be highly beneficial to the FDA as it considers possible changes to its regulations to enhance generic drug competition, " Burns said. Burns also is a Bloomberg BNA advisory board member.

Proposed Generic Drug Legislation

In his letter to Gottlieb, Grassley pointed to two bills he has co-sponsored. One is the Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act ( S. 974), which would deter branded drugmakers from using risk evaluation and mitigation strategies (REMS) to delay generic drug launches.

The FDA sometimes requires a REMS plan from a drugmaker to ensure the benefits of the product outweigh its risks. Some branded drug manufacturers use REMS to keep generic drugmakers from obtaining samples of branded drugs needed for bioequivalence testing of the generic product.

The other measure is the Preserve Access to Affordable Generics Act ( S. 124), which would limit so-called pay-for-delay lawsuit settlements in which generic companies agree not to compete with a brand drug for a period of time.

Grassley also said he encourages Gottlieb to work with the FTC and the Department of Justice to address anti-competitive behavior in the drug industry.

FDA’s Public Meeting

The FDA said in a separate June 21 Federal Register notice announcing the July 18 public meeting that branded drugmakers are sometimes using exclusivity periods provided in the Hatch-Waxman Act to delay generic competition to an extent that may not have been intended by the statute. The Hatch-Waxman Act of 1984 established the expedited approval pathway for generic drugs.

The agency also said certain elements of the approval process for both brand and generic drugs have been used in ways that may inappropriately hinder generic competition.

The FDA said it is seeking comments on “the appropriate balance between encouraging innovation in drug development and accelerating the availability to the public of lower cost alternatives to innovator drugs.”

Written comments on the meeting will be accepted until Sept. 18 (Docket No. FDA-2017-N-3615).

Daniel A. Kracov, who is the co-chairman of the life sciences and health regulation practice at Arnold & Porter Kaye Scholer LLP in Washington, told Bloomberg BNA June 21 he thinks a lot of the issues for the meeting have already been dealt with and he doesn’t think there’s a lot of room for changes. Kracov also is a Bloomberg BNA advisory board member.

“Exclusivity periods have worked well. There are some changes that could be made on the margin, but you also don’t want to reduce incentives for innovation by toying with something that’s been around since the early 80’s and that’s largely worked pretty well,” Kracov said. “There are a lot of generic drugs on the market; 80 percent of prescriptions are for generic drugs.”

Kracov said the FDA could look at improving the generic drug approval process, in terms of the amount of guidance, consultation, and help that generic companies receive from the agency. He said when he has dealt with the FDA’s Office of Generic Drugs “the process can be opaque and the timelines can get very attenuated.”

Faster Review of Priority Generic Drugs

The FDA June 20 also released a draft guidance to help generic manufacturers get shorter review times for priority generic drugs.

The draft guidance describes the process for using a presubmission facility correspondence (PFC) to obtain a shorter review goal date for priority generic drug applications. The agency said submitting the PFC two to three months before submitting the generic application will help the FDA’s assess the facilities listed in the application, including whether an inspection is necessary. The draft guidance describes the information that should be submitted in a PFC.

Bloomberg Intelligence analyst Brian Rye told Bloomberg BNA in a June 21 email the draft guidance “seems consistent with Gottlieb’s push to remove regulatory hurdles to faster generics. He views such a push as part of the FDA’s role in responding to risking brand-name drug prices.”

Comments on the draft guidance are due Sept. 18 (Docket No. FDA-2017-D-3101). A notice announcing the draft guidance was published in the June 20 Federal Register (82 Fed. Reg. 28,072).

Generic Drug User Fee Agreement

The PFC was part of the agreement between industry and the FDA to reauthorize the Generic Drug User Fee Amendments (GDUFA). The FDA’s user fee programs expire Sept. 30, and Congress is considering legislation to reauthorize them. The agreement between industry and the FDA serves as the basis for the legislation.

Kurt R. Karst, a life sciences attorney with Hyman, Phelps & McNamara in Washington, told Bloomberg BNA June 21 that it’s unusual that the FDA would issue draft guidance in the user fee agreement before the legislation is passed.

But he said it’s necessary in this case because for companies and the FDA to effectively implement GDUFA, which would start Oct. 1, companies are going “to have to get the ball rolling sooner rather than later so that they can start the presubmission. If nothing starts until Oct. 1, then you’ve already got a delay going on.”

To contact the reporter on this story: Bronwyn Mixter in Washington at bmixter@bna.com

To contact the editor responsible for this story: Brian Broderick at bbroderick@bna.com

For More Information

Grassley's letter is at http://src.bna.com/p3T.

Gottlieb's blog post is at http://src.bna.com/p3W.

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