On July 18, 2017, the Food and Drug Administration (FDA) held a public meeting1 to obtain input on steps it can take to encourage innovation in drug development while accelerating consumer access to generic drugs, a balance Congress intended to strike when it enacted the Drug Price Competition and Patent Term Restoration Act of 19842 (Hatch-Waxman Amendments). At the meeting, stakeholders described various elements of the regulatory regime, product development process, and market structure that have led to disruptions to this balance and provided examples of market participants’ use of regulations and regulatory procedures to thwart competition, a practice Commissioner Gottlieb characterized in his opening comments as “gaming the system.”3

Several participants discussed the effect of patent and exclusivity periods, regulatory review timelines, insurance reimbursement practices, the number of generic competitors and timing of generic entry, and other market forces on the price of branded and generic prescription drugs. Markus Meier, Acting Director of the Federal Trade Commission’s Bureau of Competition, discussed the FTC’s enforcement efforts over the last several years to challenge practices that have impeded generic entry, such as “pay-for-delay” reverse patent settlements among innovator companies and generic companies and sham patent litigation. Many of the other presenters focused on specific FDA regulations that frustrate generic entry, as well as pay-for-delay settlements, sham litigation, and other activities undertaken by industry participants that some speakers characterized as abusive and anti-competitive.

One area of particular focus involves Risk Evaluation and Mitigation Strategy (REMS) programs, which some allege have been used to prevent potential generic competitors from obtaining reference product in sufficient quantity to conduct bioequivalence studies to support abbreviated new drug application (ANDAs). Generic companies also asserted that they had been prevented from participating in “single, shared system” REMS programs. Innovator drug companies described the legitimate reasons to impose tight controls on distribution, such as concerns about patient safety, liability, and supply limitations. In 2014, FDA published a draft guidance document to facilitate the provision of samples to generic companies, but that guidance has not yet been finalized.4 Various presenters expressed support for current legislative proposals that have been drafted to address those concerns.5

Several presenters also discussed features of the statutory and regulatory framework that, they said, enabled innovator companies to “evergreen” their products — that is, to extend patent or regulatory exclusivity periods by seeking approval for ostensibly modest product changes. Presenters debated whether certain changes provide patients with additional value and whether agency resources should be allocated to prioritize the review of new therapies over the review of incremental changes to existing products.

Another topic examined was the number and success rate of “blocking” petitions filed by innovator companies. Participants discussed whether innovator companies have used the citizen petition process to delay generic entry by raising objections that are not scientifically valid or do not raise important public health issues. Industry stakeholders defended the petition process as an important vehicle that allows petitioners to raise legitimate scientific issues. They also noted the legal limitations that would preclude any effort to reduce access to the petition process.6 Some stakeholders suggested that FDA consider ways to avoid wasting resources on unmeritorious petitions, such as by using the timing of a petition vis-à-vis the end of the innovator’s patent or exclusivity period as a proxy for whether the petition was filed as a delay tactic.

FDA was primarily in “listening mode” during the day-long program, but FDA panelists asked the presenters to provide specific recommendations on changes the agency can implement to encourage competition, as well as avoid unnecessarily diverting resources away from reviewing innovative therapies while remaining within its regulatory authority and adhering to its statutory mandates. Agency officials encouraged presenters and other interested persons to submit comments to the public docket, which closes on September 18, 2017.7