Tensions between branded pharma companies and their generic competitors are boiling over into court battles over the “right” of generics to demand, and the “right” of branded manufacturers to withhold, brand drug samples for generic bioequivalence testing, a precursor to an ANDA filing. Free-market principles, antitrust law and the intent of the Hatch-Waxman Act are at the heart of litigation between Swiss drug manufacturer Actelion Pharmaceuticals and generic drug producers Apotex Inc. and Roxane Laboratories and a recently filed suit involving generic Accord Healthcare and branded Acorda Therapeutics. The key questions posed in both cases is whether and to what extent can a branded drug company be forced to sell products to a generic competitor?

Background

In Actelion Pharmaceuticals and Actelion Clinical Research v. Apotex Inc., Apotex Corp., and Roxane Laboratories, Case No. 1:12-CV-05743 (D.N.J.), Actelion filed a pre-emptive suit for declaratory judgment, claiming that Apotex’s and Roxane’s attempts to force a sale of Tracleer® – Actelion’s flagship product for the treatment of pulmonary arterial hypertension (“PAH”) – so that the generics can perform bioequivalence testing, violate the core free market principle that a person or company is free to do (or refuse to do) business with whomever he or it wishes. In addition to free market principles, Actelion further charges that because Tracleer® is subject to a FDA-imposed Risk Evaluation and Mitigation Strategy (REMS), restricting the drug’s distribution to certain patients for safety reasons, Actelion is barred from providing the generic companies with Tracleer® samples, even for the limited purpose of bioequivalency testing.

In their Answers to to the suit, Apotex and Roxane have filed counterclaims, charging that Actelion’s refusal to sell them Tracleer® samples – despite assurances that the generics will abide by all REMS restrictions – undermine the Hatch-Waxman balance of rights between branded and generic companies and violate the antitrust laws by essentially extending Actelion’s sole “monopoly” in the PAH oral treatment market.

A number of Amicus Curiae briefs have been filed in the Actelion case, including one from the Federal Trade Commission (FTC) in support of the generics’ position. As an FTC Memo accompanying the FTC’s Amicus brief explains:

… Actelion’s legal position, if adopted by the court, could pose a significant threat to competition in the pharmaceutical industry. In the Hatch-Waxman Act, Congress designed a regulatory framework to encourage the introduction of low-cost generic drugs while preserving incentives for innovation. The Act created a mechanism for accelerated approval of generic drugs based on a showing that the generic formulation is bioequivalent to the brand drug, which has been very successful in facilitating generic competition and generating large savings for consumers.

The FTC’s brief goes on to argue that Hatch-Waxman cannot function as Congress intended if generic firms are unable to access samples of brand products. Without taking a position on the factual merits of the case, the FTC explains that the generic firms’ antitrust claims are not barred as a matter of law.

In Accord Healthcare and Intas Pharmaceuticals v. Acorda Therapeutics and H.D. Smith Wholesale Drug Co., Case No. 0:13-CV-60742 (S.D. Fla.), generic producer Accord Healthcare and India-based Intas Pharmaceuticals filed suit earlier this month, claiming that Acorda Therapeutics, which manufactures multiple sclerosis drug Ampyra®, must sell Accord Healthcare samples of Ampyra® immediately, in order to begin bioequivalence testing needed for a planned ANDA submission date of January 22, 2014. The Accord Healthcare suit alleges that brand name manufacturers like Acorda Therapeutics are prohibited from using FDA-required REMS to “block or delay approval of” an ANDA. Unlike Apotex and Roxane, Accord Healthcare sued its branded rival first in this case, copying the exact language of the Apotex and Roxane counterclaims. Given that Ampyra® is also subject to a REMS, it safe to assume that Acorda Therapeutics will file an Answer making the same REMS-based and free market principle arguments as Actelion.

Observations

Ordinarily, generic manufacturers don’t need the cooperation of their branded rivals in order to acquire brand drug samples for bioequivalency testing: they merely purchase the drugs from wholesalers on the open market. However, because both Tracleer® and Ampyra® are subject to REMS, wholesalers acquiring these drugs are prohibited in their agreements with the branded companies from selling the drugs except to healthcare providers under restricted circumstances. For Actelion, the loss of patent protection for its flagship (and only real money-making) product – and the fight to keep Tracleer® samples out of the hands of its generic rivals for as long as possible – makes economic sense. Moreover, since there is no requirement in Hatch-Waxman that branded manufacturers provide their generic rivals with drug samples for ANDA filing purposes, Actelion’s free market principles arguments may take them a very long way and force the courts to make a decision they probably never thought they would have to make.