The Association for Accessible Medicines (AAM) has penned a letter (here)  to the FTC, providing comments requested by that Agency relating to the Public Workshop held by FTC, Understanding Competition in U.S. Prescription Drug Markets: Entry and Supply Chain Dynamics, held  November 8, 2017 in Washington, D.C..

AAM (formerly the Generic Pharmaceutical Association [GPhA]) highlighted several areas of concern in their comments:

  • According to AAM, the balance created by the Hatch-Waxman Act has been skewed towards the innovator industry
  • “Changing and increasingly challenging market and reimbursement frameworks, including significant and monopolistic purchaser consolidations” is adversely impacting the generic market place
  • “The abuse of laws and regulations by bad actors”
  • “A failure of policy to account for the unique challenges facing generic and biosimilar medicines”

According to AAM, barriers to competition are associated “with extensive consolidation in the wholesale and retail markets”, often leading to the inability of some manufacturers due to the lack of contracts, forcing some to temporarily discontinue manufacture. “In fact, because of tremendous consolidation among purchasers, today roughly 200 generic companies compete to sell to three purchasing groups that collectively control 90 percent of the market.” One could see that some generic players, especially in a crowded market where perhaps 5-10 players have approved applications, might have trouble selling their products.

The document goes on to describe the planning and decisionmaking that goes into selecting generic targets as well as potential timelines for development and regulatory submission and review.  In addition, it describes the reimbursement system for generic drugs and some of the fundamental concepts and supply chain components that drive pricing.

Comments on abusive tactics that impact generic competition were identified by AAM as:

  • REMS and restricted distribution systems making obtaining brand drug samples for required regulatory testing very difficult if not impossible. The letter quotes a 2014 study (here) that “concluded that REMS abuse costs the U.S. health care system $5.4 billion annually.”
  • Supply side consolidation as a threat to generic competition, with potential threat to ANDA applicants, either leaving the marketplace or stopping production of their product, which could potentially lead to drug shortages and increased prices.

We suggest you read the AAM’s letter and discuss it within your organization.