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Antitrust Health Care Chronicle March 2013

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Antitrust Health Care Chronicle March 2013 Antitrust Health Care Chronicle March 2013 Risky Conduct with Risk Mitigation Strategies? The Potential Antitrust Issues Associated with REMS By Lauren Battaglia1 Hogan Lovells Introduction require as a condition of approval of a drug that is believed to pose health and safety risks to From an antitrust perspective, the certain patients taking the drug. Among the pharmaceutical sector continues to be one of the measures that might be required as part of a most heavily scrutinized industries in recent REMS program are medication guides and years. Even after a year in which the FTC communication plans to convey the risks to reported that it had sought relief in over 97% of patients, as well as multi-level restrictions on horizontal pharmaceutical mergers in which the 2 distribution of the drug. Increasingly generic agency had issued a second request since 1996, drug manufacturers are accusing branded firms and the debate over so-called pay-for-delay of using REMS-related distribution restrictions agreements reached another level with the Third 3 as a tool to prevent would-be generic Circuit’s ruling in K-Dur and the Supreme competitors from entering the market. Former Court’s decision to grant certiorari in FTC v. 4 FTC Chairman Jon Leibowitz echoed these Watson Pharmaceuticals, Inc., new fronts of concerns, describing this type of conduct as enforcement continue to emerge. “particularly troubling.”5 One of the latest fronts to surface in the struggle between branded and generic drug Indeed, antitrust allegations related to REMS manufacturers is occurring in the context of have already given rise to both a government drugs operating under a Risk Evaluation and investigation and private litigation. Most Mitigation Strategy (“REMS”). A REMS recently, however, litigation is currently program is a set of measures the FDA may pending in federal district court in New Jersey in which Actelion Pharmaceuticals, a branded 1 Lauren Battaglia is an Associate in the Washington, DC manufacturer, sued generic firms— Apotex office of Hogan Lovells. Corp. (“Apotex”) and Roxane Laboratories, Inc. 2 (“Roxane”). Actavis Elizabeth LLC (“Actavis”) Fed. Trade Comm’n, HORIZONTAL MERGER INVESTIGATION DATA, FISCAL YEARS 1996-2011, at 14, successfully petitioned to intervene in the case Table 4.5 (Jan. 2013), http://www.ftc.gov/os/2013/01/130104horizontalmergerre port.pdf. 5 Dina El Boghdady, Generic-drug Makers’ Complaints Over Brand-Name Access Prompt Investigations, WASH. 3 In re K-Dur Antitrust Litigation, 686 F.3d 197 (3d Cir. POST, May 22, 2012, 2012) (holding that pharmaceutical patent settlements that http://www.washingtonpost.com/business/economy/gener restrict generic entry and involve a payment to the generic ic-drug-makers-complaints-over-distribution-law- are presumptively unlawful). provoke- 4 677 F.3d 1298 (11th Cir. 2012). investigations/2012/05/22/gIQAhExKiU_story.html. 26 Antitrust Health Care Chronicle March 2013 as a counterclaim plaintiff asserting that vary according to the type of application Actelion may have an antitrust duty to supply involved.8 them with samples of Actelion’s drug, Tracleer, The FDA can require that a REMS for a which is being marketed and distributed under a particular drug include any combination of the REMS (the “Tracleer litigation”). following elements: a medication guide and As with so many practices in the pharmaceutical patient package insert, a communication plan, sector, analyzing REMS-related issues from an and, where necessary, “elements to assure safe antitrust perspective is a complex endeavor due use.” Elements to assure safe use are essentially to the extensive regulatory scheme in place in restrictions on the manner in which drugs are the industry. This article will describe the provided to patients, and are typically required circumstances in which these issues arise, and where the FDA determines that a medication examine the various arguments being made on guide and communication guide alone will not both sides, specifically in the context of the be sufficient to mitigate the risk associated with ongoing Tracleer litigation. a particular drug. Elements to assure safe use may take the form of provisions requiring that Background “health care providers who prescribe the drug REMS were first introduced as part of the Food have particular training or experience,” that and Drug Administration Amendments Act of pharmacies that dispense the drug are specially 2007 (“FDAAA”), which granted the FDA the certified, that the drug only be dispensed in authority to require pharmaceutical certain health care settings or only to patients manufacturers to develop a REMS where such with evidence of safe-use conditions, or that measures are “necessary to ensure that the patients using the drug be monitored or enrolled 9 benefits of the drug outweigh the risks of the in a registry. Once approved, a REMS creates drug.”6 Thus, REMS have been described as enforceable obligations for the manufacturer 10 “strateg[ies] to manage…known or potential and the FDA. In many cases REMS programs 11 serious risk[s] associated with a drug or are patentable. 7 biological product.” The FDA may require a Portions of the FDAAA also address various REMS for any New Drug Application (“NDA”), issues that might arise when an ANDA is filed Abbreviated New Drug Application (“ANDA”), or Biologics License Applications (“BLA”) at 8 any stage in the product lifecycle, however the 21 U.S.C. §355-1(i) (stating that a REMS for a drug covered under an ANDA may only be required to include elements potentially required for a REMS may a medication guide or patient package insert, and subject to exceptions, elements to assure safe use). 9 21 U.S.C. §355-1(f)(3). 6 21 U.S.C. §355-1(a)(1). 10 Questions and Answers, supra note 8 (“FDA may 7 impose civil monetary penalties for violations of the U.S. FOOD AND DRUG ADMINISTRATION, Questions and REMS provisions or the drug or biological product can be Answers on the Federal Register Notice on Drugs and deemed misbranded, and FDA could obtain injunctive Biological Products Deemed to Have Risk Evaluation and relief.”). Mitigation Strategies, http://www.fda.gov/RegulatoryInformation/Legislation/Fe 11 Many branded manufacturers have sought patent deralFoodDrugandCosmeticActFDCAct/SignificantAmen protection for their REMS programs. See e.g., U.S. dmentstotheFDCAct/FoodandDrugAdministrationAmend Patent No. 7,141,018 (Celgene patent for the REMS it mentsActof2007/ucm095439.htm. developed for its thalidomide product). 27 Antitrust Health Care Chronicle March 2013 and the Reference Listed Drug (“RLD”) is circumstances that would contravene their operating under a REMS, but these provisions REMS programs.12 leave many questions up in the air as to their Indeed, these types of allegations against one meaning and practical effect. For example, the branded manufacturer have previously given FDAAA anticipates that a patented REMS could rise to citizen petitions to the FDA, government effectively act as a barrier to entry for generic 13 investigations, and private litigation. In 2008, firms. Thus, while requiring that a generic drug Celgene Corp. was accused by two generic and the relevant RLD generally use a “single, firms—Lannett Co. and Dr. Reddy’s shared system,” the FDAAA also gives the FDA Laboratories—of using the distribution the authority to waive this requirement in restrictions mandated under its REMS program certain circumstances where the REMS is as a pretext for refusing to provide them with protected by patent or as a trade secret. Of samples for bioequivalence testing. Although particular controversy at the moment, however, Lannett filed suit alleging that the refusal is the question of whether a branded violated §2, and Dr. Reddy’s and Celgene filed manufacturer can be compelled to supply a dueling citizen petitions with the FDA, the generic manufacturer with enough of the litigation ultimately settled before substantive branded drug to facilitate the testing required for considerations of the issues, and the issues an ANDA. To qualify for approval under an raised by in the citizen petitions were never ANDA, a generic drug must be shown to be 14 addressed by the FDA. Thus, the Tracleer substitutable for the branded counterpart. A generic drug product is considered to be 12 See e.g., Complaint for Declaratory Judgment at ¶ 36- substitutable for a branded drug if the two are 38, Actelion Pharmaceuticals Ltd. v. Apotex Inc. and “bioequivalent”—something which is typically Roxane Laboratories, Inc., No. 1:12-cv-05743-NLH- established through testing involving samples of AMD (D.N.J. Sept. 14, 2012); Plaintiff Actelion the branded drug. In the absence of a restrictive Pharmaceuticals Ltd.’s Memorandum of Law in Support distribution system, including those imposed as of Plaintiffs’ Motion for Judgment on the Pleadings and to Dismiss Counterclaims at 18-20, No. 1:12-cv-05743- part of a REMS, generic firms can typically NLH-AMD (D.N.J. Jan. 16, 2013). acquire the samples necessary for this testing 13 According to the company’s SEC filings, Celgene from distributors or wholesalers. However, received two Civil Investigative Demands (“CIDs”) from where a REMS includes provisions barring the FTC relating to Thalomid and Revlimid—the first in distributors and wholesalers from selling the the fourth quart of 2009 and a second in the fourth quarter drug to entities without approval under the of 2010. The filings also state that Celgene received a REMS, generic firms may turn to the branded subpoena from the State of Connecticut which “referenced the same issues as those referenced” in the manufacturers themselves to supply the drug 2009 FTC CID. Form 10-Q Quarterly Report for Celgene samples directly. Corp. (filed Nov. 2, 2011), http://www.sec.gov/Archives/edgar/data/816284/0001104 Some generic firms have reported that their 65911060043/a11-26049_110q.htm. requests to branded firms for samples of drugs 14 with these types of REMS programs have been Lannett filed suit in federal court in the Eastern District of Pennsylvania and Celgene subsequently filed a motion denied, thereby blocking them from introducing to dismiss the suit.
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