A major basis for our criticism of the FDA’s still pending genericdrug labeling proposal, and why we prefer industry’s EAR (“Expedited Agency Review”) system better, is that the FDA’s proposal would create festival-seating style label changes, with each competing generic producer (and any still-extant branded reference listed drug (“RLD”)), on its own in deciding when to submit CBE label changes. Since plaintiffs always claim label changes are too late, liability pressures would create a huge incentive to be the first through the CBE door, no matter how flimsy the underlying scientific evidence would be. And that evidence is likely to be flimsy indeed, since each competitor would have access only to the thin sliver of scientific information available (such as through ADE reporting) to it.
That’s a terrible idea to start with, but even bad can get worse.
Now there’s another reason to fear the consequences – unintended or otherwise – of the FDA’s proposal. We don’t normally blog about drug-related antitrust issues, but last December the court in In re Suboxone (Buprenorphine Hydrochloride & Naloxone) Antitrust Litigation, ___ F. Supp.3d ___, 2014 WL 6792663 (E.D. Pa. Dec. 3, 2014), allowed another terrible idea – a troubling new “product hopping” liability theory – to go forward.
First, a bit of background. What the heck is “product hopping”? It’s antitrust shorthand for allegations that an innovator manufacturer changed some attribute of a drug that was about to lose patent protection from generic competition in order to move consumer sales to the revised product, which (usually due to a more recent patent) is not imminently subject to such competition. Even though otherwise legal, such changes, the antitrust plaintiffs contend, violate the antitrust laws by making it harder for competing generics to enter the marketplace. Sometimes “product hopping” plaintiffs have been allegedly disadvantaged generic competitors, other times, they are “direct purchasers” or “end payors” claiming increased cost. Suboxone, 2014 WL 6792663, at *1. Of course, governments can also elect to prosecute antitrust actions.
Most product-hopping suits have previously confined themselves to the form (e.g., tablet vs. capsule) of a drug or its dosage, without involving any safety impact. The Suboxone suit added a safety twist, with the plaintiffs claiming that the defendant had created a nonexistent safety issue. The defendant allegedly “falsely disparage[ed]” the older (tablet) form of the product compared to a newer (film) form “through fabricated safety concerns” that included “ultimately removing [the old form] from the market.” 2014 WL 6792663, at *1. The product-hopping theory in Suboxone thus used the antitrust laws as a means of second-guessing a safety-related basis – allowed by the FDA – for a product change:
Plaintiffs explain that once the FDA approved the [new version] . . . [defendant’s] sales associates allegedly met with physicians and, in addition to promoting [the new version], disparaged [the old version] and warned of false safety concerns. It is also alleged that [defendant] publicly announced the removal of [the old version] from the market for these fabricated safety reasons.
Id. at *3. Through an allegedly “sham” citizen’s petition, the defendant also sought additional FDA safety restrictions. Id. There were a host of other allegations, but the assault on safety-related product changes as false and anti-competitive is the one that concerns us here in Product Liability Land.
The court allowed the plaintiffs to proceed with that attack. Even a product recall was claimed to be an antitrust violation. Nor was there any allegation that any of the product alterations at issue were made for without full knowledge of – indeed in accordance with requests made to − the FDA:
Plaintiffs allege that the wrongful conduct included raising false safety concerns and disparaging [the old version]. . . . The threatened removal of the [old version] from the market in conjunction with the alleged fabricated safety concerns could plausibly coerce patients and doctors to switch [to the new version]. A patient that preferred the [the old version] despite the safety concerns might be further persuaded to switch . . ., believing that their favored product would soon be removed from the market. . . . It is also alleged that [defendant’s] sales representatives . . . discourage[ed] physicians from writing prescriptions for [the old version] under the guise of false safety concerns − in particular, that the lack of unit dose packaging in the [old version] raised the risk of pediatric exposure. Further, Plaintiffs claim that [defendant] announced the removal of the tablets from the market . . . due to fabricated safety concerns in an attempt to switch patients from the tablet to the film. . . . These allegations have been made with particularity in accordance with Rule 9(b), and are sufficient.
Suboxone, 2014 WL 6792663, at *10-11 (various citations, including to the complaint, omitted). Under Suboxone, antitrust plaintiffs can assert that safety-related changes to prescription drugs are really pretextual, despite the FDA allowing them – as the CBE (and other) regulations provide. From our vantage point, it looks like a company being damned (by product liability plaintiffs) if it doesn’t make a safety change and triple-damned (by antitrust plaintiffs) if it does.
The FDA’s generic drug labeling proposal would only make things worse. It incentivizes haste based upon incomplete information. While Suboxone involved a safety change made just prior to generic competition, the same thing could have been done – by either a generic or a still-competing innovator RLD – after generic products were introduced. Applying the claimed Suboxone“facts,” as little as one incident of pediatric exposure to “old” tablets could be considered a safety risk, particularly when the manufacturer receiving the report would not have access to its competitors’ ADE data. The threat of product liability, should the FDA succeed in destroying generic preemption as it now exists, could well lead to safety changes to products (such as conversion to film administration) of marginal necessity based on only thin slices of market-related data. Anyone who fails to follow suit will have its competitors’ changes used against it in the ensuing product liability litigation. Then antitrust plaintiffs pile on, challenging the same changes on Suboxone theories as pretextual and anti-competitive.
Why create a litigation magnet? You’ll have to ask the FDA.
These are all good reasons to support the industry’s (both innovator and generic sides agree) alternative EAR proposal, since it would funnel all emergent safety issues through the FDA, which could command access to every competing manufacturer’s safety data and evaluate the risk on the basis of all the facts. Not only is an FDA-reviewed and FDA-mandated safety change based on full information much more likely to be correct – what counts most – but it is much less likely to be attacked as an anti-competitive “sham” in subsequent antitrust litigation.