Senators take aim at drugmakers that use REMS to block competition

Generic drugmakers have accused their branded compatriots of using Risk Evaluation and Mitigation Strategies (REMS) to keep them from bringing generics of some meds to market. Now a bipartisan phalanx of Senators wants to give the generic industry a legal tool to fight that maneuver.

The top Republicans and Democrats on the Judiciary Committee and the Subcommittee on Antitrust, Sens. Charles Grassley, Patrick Leahy, Mike Lee and Amy Klobuchar, have introduced a bill in the Senate to fight the problem. The CREATES Act would allow generic drugmakers to seek a quick legal solution if a branded manufacturer denies them samples needed to develop their generic versions of a drug or prevents generic competitors from getting into the REMS program required for some drugs that the FDA has deemed particularly risky.

According to an outline of the act, it would allow a generic drug manufacturer facing either of these delay tactics to go to court for injunctive relief and for a judge to award damages. This would be faster than the drawn out process of suing on antitrust grounds.

As a particularly egregious example of the tactic, the outline points to the case of Turing Pharmaceuticals, formerly run by notorious CEO Martin Shkreli. In 2015, Turing increased the price of its antiparasitic drug Daraprim 5,000% overnight, to $750 per pill from $13.50. An employee of the company testified at a Congressional hearing the drug company blocked generic drugmakers from getting samples of the drug as part of its sales plan.

“Unfortunately, we're seeing some brand-name drug companies engage in anti-competitive tactics that delay entry of lower cost generic drugs into the market,” Sen. Grassley said in a statement. “This bill takes important steps to ensure that our laws are not frustrated."

The bill was applauded by the Generic Pharmaceutical Association (GPhA) which in 2014 produced a study that estimated drugmakers used REMS to protect from competition for $5.4 billion in sales on 40 small molecule drugs. About 40% of FDA-approved drugs are now subject to REMS. The report warned that if left unchallenged the impact on the development of price busting biosimilars could be enormous.

There also is a bill in the House of Representatives which attacks the same problem but with a different approach, Reuters reports. It would require the generic company seeking a REMS drug to get FDA authorization to obtain the sample.

The proposed law comes amid a number of administration-led and Congressional efforts to attack rising prices of both branded and generic drugs. There are DOJ investigations into drug pricing, including possible collusion by generic drugmakers. Sen. Bernie Sanders and a colleague also have introduced a bill that, among other things, would give Medicare the power to negotiate prices with drugmakers.

- an outline of the CREATES Act can be found here 
- text of legislation can be found here
- read Sen. Grassley’s release 
- here’s the GPhA statement
more from Reuters

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