Liability of harmful side effects questioned
This summer, the Supreme Court will decide on a case that could determine whether generic drug makers can be held liable when patients suffer harmful side effects from taking their drugs.
The case, Mutual Pharmaceutical v. Bartlett, involves Karen Bartlett, who took Mutual’s sulindac, a generic version of Merck’s Clinoril. After taking the drug, Bartlett developed and suffered near-blindness, esophageal burns and lung damage, as well as the skin disorders Stevens-Johnson syndrome and toxic epidermal necrolysis. A jury awarded Bartlett $21 million for her injuries, and the Supreme Court heard the case in mid-March.
The issue is, while Bartlett suffered the injuries after taking Mutual’s drug, under federal regulations governing generic drugs, a generic drug company typically does not have to conduct clinical trials — only demonstrate that its product is identical to the branded drug. It relies on the safety and efficacy data collected by the developer of the original branded drug.
"The previous court suggested that the manufacturer in this case, Mutual Pharmaceutical, could comply with the law by simply halting production of the Food and Drug Administration-approved drug in question, sulindac," Generic Pharmaceutical Association president and CEO Ralph Neas said. "This pain drug has been available since 1979, has been dispensed more than 300 million times from 2007 to 2012, and has exhibited a typical safety profile. We cannot confer to unqualified juries the power to undermine FDA rulings and potentially deprive millions of patients the medicines they need. Decisions about the safety and efficacy of drugs belong in the capable hands of the FDA."
In PLIVA v. Mensing, a 2011 case cited by Mutual, the Supreme Court determined that because generic drugs and their labeling are required to be identical to their branded counterparts, generic drug companies cannot be responsible for inadequate labeling.
The case closely follows a ruling by the Alabama state Supreme Court in January in a similar case. The Alabama court ruled that brand-name drug companies could be sued if patients suffer complications from generic versions of their medicines, according to published reports. According to the New York Times, an Alabama man named Danny Weeks claimed he developed tardive dyskinesia after taking generic versions of Pfizer’s acid reflux drug Reglan (metoclopramide). Pfizer acquired rights to the drug when it bought Wyeth in 2009, and generic drug makers Teva and Actavis make generic versions. Weeks had originally filed the suit in federal court, but the court asked the Alabama Supreme Court to determine if Weeks could sue the branded drug makers.
States consider ‘carve-out’-style laws for biosimilars
While the passage of the Patient Protection and Affordable Care Act of 2010 was a milestone in a number of respects, it also was one of the biggest moments in the history of the generic drug industry since the 1984 passage of the Hatch-Waxman Act, which created an abbreviated regulatory approval pathway for generic pharmaceutical drugs.
The healthcare reform law created a similar, abbreviated pathway for biosimilars, and while the Food and Drug Administration has yet to put regulations in place, many analysts foresee significant growth in the industry when that happens. According to Visiongain, a British market-research firm, the global market for biosimilars will see rapid growth over the next 10 years as biosimilars hit the market in the United States. Indeed, companies ranging from generic drug manufacturers that already make biosimilars for the European market — including U.S.-based Hospira, Israel-based Teva Pharmaceutical Industries and Switzerland-based Sandoz — to those looking to enter the market, such as Actavis and Mylan, and large pharmaceutical companies, including Merck and Boehringer Ingelheim, all hope to claim their piece of the market.
But one major obstacle to biosimilars has been the biotechnology industry. Biotech companies have supported bills in numerous states that, while not banning substitution of biosimilars for branded biotech drugs, would certainly get in the way, saying they are necessary to promote patient safety. Unlike generic drugs, which are required to be identical to their branded counterparts, they say, it is much harder to avoid differences between branded biotech drugs and biosimilars due to the likelihood of genetic differences between the cell lines used to make them, which can dramatically change a biosimilar’s properties and therefore its safety and efficacy profile.
In March, Virginia Gov. Bob McDonnell signed into law a bill that would prohibit a pharmacist from dispensing a biosimilar to substitute for a branded biotech drug if the prescriber indicated that substitution was not allowed or if the patient insisted on receiving the branded product. It also would require the pharmacist to inform the patient before dispensing and record the name of the product and its manufacturer on the dispensing record and prescription label. Pharmacists would further be required to provide cost information to the patient for the branded product and the biosimilar. The Generic Pharmaceutical Association, a Washington trade group that represents generic drug manufacturers, criticized the bill, but the bill contains a two-year sunset clause, meaning it will expire in 2015, before biosimilars are likely to hit the market in significant numbers. A similar bill failed in Maryland’s legislature.
Meanwhile state legislators in Florida passed a bill last month that would allow for substitution of a biosimilar for a branded biologic when they were determined to be interchangeable, and also required the state board of pharmacy to maintain a current list of interchangeable products — drawing praise from the GPhA. An earlier version of the bill also contained restrictions on substitution, but the final version was waiting for the governor’s signature, at press time, with none of them attached.
All of these bills might be moot, though. President Barack Obama’s $3.8 trillion 2014 budget proposal sent to Congress in April would ban state laws to restrict biosimilar substitution, if passed.
"Biotech companies have supported bills in numerous states that, while not banning substitution of biosimilars for branded biotech drugs, would certainly get in the way."
Generic drug reimbursement cuts draw anger, controversy in Canada
When does the double-edged sword of generic drug price reductions begin to cut the government agency or health system holding the sword?
That’s the question many pharmacy leaders in Canada have for the provincial health system policy-makers who have embarked on a crusade to whack pharmacy reimbursement levels for many lower-cost generic medicines sold under the nation’s publicly funded health system. The effort has drawn the ire of pharmacy advocates even as proponents in government and health policy circles tout its cost-saving benefits.
"Retail or reimbursed prices of generic prescription drugs have been dramatically reduced across Canada over the past few years," said Jim Keon, president of the Canadian Generic Pharmaceutical Association.
The campaign is nationwide and unrelenting. Ontario, British Columbia and Quebec opted to cut generic prescription payments to 25% of the branded equivalent price, beginning April 1; British Columbia legislators pegged another reduction, to 20% of the brand-name cost, to take effect in April 2014. Last June, New Brunswick reduced generic prices to 40% of the branded price, and followed up with another reduction, to 35%, in December 2012.
The province of Alberta went further, adopting a sweeping, across-the-board reduction in generic drug reimbursements with its 2013 budget that slashed payments for generics from 35% to 18% of branded-drug prices beginning May 1 of this year. The Alberta Pharmacists’ Association expressed "shock" at the cuts, particularly in light of the fact that generics were reimbursed at 75% of branded-drug prices as recently as two years ago.
Canada’s generic industry group was incensed. "The massive and indiscriminate cuts to reimbursed prices of generic pharmaceutical products announced by the government of Alberta 7#8230; are wholly unacceptable to Canada’s generic pharmaceutical manufacturers and risk patient access to high-quality, affordable prescription medicines," asserted CGPA’s Keon. "These across-the-board cuts represent a betrayal of our industry and were announced without consultation or prior notice to generic pharmaceutical manufacturers, community pharmacy or other key stakeholders in the pharmaceutical supply chain."
The most recent moves followed a controversial, nationwide cut in reimbursements for six generic medicines by the so-called Council of the Federation’s Health Care Innovation Working Group, comprised of provincial and territorial representatives seeking ways to save on health costs. The cuts, which took effect April 1, 2013, pared the price of six widely used medicines to 18% of the brand-name equivalent across nine provinces — only Quebec isn’t participating — and all three territories.
Pharmacy and generic-industry interest groups are crying foul, saying the cost-cutting crusade is a short-sighted scramble to save scarce public health dollars that will ultimately lead to higher overall costs by reducing incentives to dispense lower-priced generics. "This is a shaking of the foundations of the profession, with rapid changes in revenue and expense models that have been formed over the last 30 years," said Dawn Martin, executive director of the Pharmacists’ Association of Saskatchewan.
According to a report in the Toronto Globe and Mail, "The spending cuts could trickle down the complex funding model for pharmacists in Canada, cutting into pharmacies’ bottom lines by reducing drug company profit margins and therefore, subsidies those companies give to pharmacies." The six generics on the chopping block — which treat heart disease, gastrointestinal ailments, depression and other conditions — account for roughly one-fifth of all public spending on generics in Canada, according to the report, spawning hopes by provincial health officials that the cuts could eventually save a combined 100 million Canadian dollars a year.
When those cuts were announced in January, the Canadian Pharmacists Association expressed dismay that the council made no commitment "to invest some of the predicted savings into improved health care for Canadians."
"We were disappointed that no government other than the government of Saskatchewan committed to reinvest any portion of the savings from the lower prices into expanded pharmacy services," said Jeff Morrison, director of government relations and public affairs for the national pharmacy group. "Our position had always been that any system of reduced generic pricing should address enhancements to patient care."
Despite the controversy, however, the issue is far from cut-and-dry. Canadians pay more for generics than most of the rest of the world, and me-too medicines account for an estimated 65% of Canada’s prescription market, compared with 84% in the United States. In an interview with the Globe and Mail, Michael Law, a University of British Columbia professor with UBC’s Centre for Health Services and Policy Research, said the nation’s "archaic buying system" led Canada to pay far more for generics than many other countries.
"We’d developed a system where we were systematically overpaying for generic drugs," Law said.
Pharmacy retailers in Canada are sympathetic to their customers’ confusion over drug pricing — and in particular, over the provincial governments’ increasing pressure on generic drug prices. Pharmacy providers also are eager to position themselves as consumer allies on the issue.
"Drug pricing is an issue that raises many questions among customers — and rightly so," Quebec-based drug store operator Uniprix tells consumers on its website. "The different drug plans that exist in Quebec [i.e., private and public] and the various conditions that apply in each case, combined with the competitive nature of the free market, means that drug prices can vary from one pharmacy to another or even from one month to the next."