The Association for Accessible Medicines (AAM) said a new report shows that abuse of the Food and Drug Administration’s Risk Evaluation Mitigation Strategies (REMS) safety program is hampering the market entry of new generic drugs.
This week, AAM said a report by Alex Brill, CEO of economic policy consultancy Matrix Global Advisors, titled “REMS and Restricted Distribution Programs,” finds that abuse of REMS could block as much as $22 billion in branded drug sales from generic competition.
“REMS programs are sometimes required by the Food and Drug Administration to help ensure the safety of certain prescription drugs. Depending on the level of risk associated with a product, a REMS program can require restricted distribution of a drug,” the report stated. “But brand drug firms have been accused of using this requirement to deny generic manufacturers access to drug samples, which generic firms need for bioequivalence testing. Brand companies also self-impose restricted access programs on other products for the purpose of blocking access to drug samples.”
Specifically, Brill’s analysis revealed that 74 drugs, with combined sales of $22.7 billion last year, comprise the restricted access drug segment. Of those medications, 41 totaling sales of $11.5 billion are restricted by REMS programs, and 33 totaling sales of $11.2 billion are restricted by non-REMS programs.
In addition, seven of the drugs — four restricted by REMS programs and three restricted by non-REMS programs — generate sales of more than $1 billion and account for over 50% of total sales in the segment.
“We need to tear down the barriers that are keeping more affordable generic drugs from reaching patients, and stopping this anticompetitive behavior is a good place to start,” commented Chip Davis, president and CEO of AAM, formerly called the Generic Pharmaceutical Association (GPhA).
The continued public outcry over high drug prices has spurred policymakers to identify obstacles to the market introduction of new, lower-cost generics, Brill noted.
“Given the size and scope of the pharmaceutical market subject to a REMS or similar distribution restriction, this issue warrants attention on the scale of other high-priced drugs that have generated headlines and congressional inquiries,” the report concluded. “There are valid public health reasons for restricted access programs for certain drugs, but misuse of these programs to block generic competition has a direct negative impact on consumers and taxpayers.”
In response, the Pharmaceutical Research and Manufacturers of America (PhRMA) said the Matrix/Brill report’s assertion that REMS programs are being used to squelch generic competition is false.
“Federal law provided the U.S. Food and Drug Administration with the authority to require manufacturers establish REMS programs to ensure appropriate safeguards to minimize potential risks and ensure physicians are equipped with the information needed to prescribe medicines safely,” PhRMA said in a statement. “The report also ignores the many factors beyond REMS that contribute to a lack of a generic or biosimilar competitor, including regulatory uncertainty, insufficient market incentives and the costs and complexities related to the distribution of certain medicines.”
According to PhRMA, the report includes recently approved drugs with a significant period of intellectual property protection remaining, “meaning removing REMS would not result in earlier market entry of a generic or biosimilar.”
“This report distracts from the discussion that needs to be had about how best to address the real barriers to increased competition, such as lack of sufficient economic incentives when in certain circumstances, such as small patient populations,” PhRMA said.
*Editor’s Note: Blog post updated with comment from PhRMA.
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