46 Pages Posted: 4 Jun 2012 Last revised: 30 Jul 2013
Date Written: June 3, 2012
In recent years, brand-name drug companies have engaged in an array of conduct that has delayed generic competition. While some of the activity — such as settlements between brand and generic firms and “product hopping” from one drug version to another — has received attention, another behavior has, until now, flown under the radar.
This Article examines the activity of “citizen petitions.” A citizen petition is a request for the U.S. Food and Drug Administration (FDA) to take an action such as evaluating a drug’s safety or effectiveness. When used appropriately, it could raise awareness of legitimate concerns with a drug. But when used inappropriately, it could extend the brand firm’s monopoly by delaying FDA approval of generic drugs. This delay could result in literally millions of dollars a day being transferred from consumers to drug companies.
Despite their delaying potential, citizen petitions have not been examined in significant detail. This Article offers the first empirical study of citizen petitions, reviewing every petition filed with the FDA between 2001 and 2010. It finds that petitions have increased in the past decade and that 68% of petitions are filed by brand companies, with more than 75% of brand petitions targeting generic drugs.
The study concludes that the FDA has granted 19% of citizen petitions and has denied 81%. It finds that generics’ petitions are more successful, with 28% granted and 72% denied, as compared to brands’ petitions, of which 19% are granted and 81% denied.
To reduce delays from petitions, Congress enacted legislation in 2007 that required the FDA to rule on certain petitions within 180 days. This study finds that this legislation has not been successful in reducing the number of petitions. After passage of the legislation, the average number of filings per year increased from 27 to 34. Brand petitions against generics increased from 9 to 16 per year. And the grant rate for brands’ petitions against generics declined from 20% to 19%.
Building on the empirical study, the Article highlights the incentives brand firms have to file petitions, along with the role petitions play in the toolbox of delaying conduct. It also introduces examples that demonstrate the problem, such as the petitions delaying (1) depression drug Wellbutrin for 133 days at a cost to consumers of $600 million and (2) insomnia drug Ambien for 1225 days at a cost of $3.1 billion.
The landscape in the pharmaceutical industry today is ripe for petitions, with an impending “patent cliff,” declining drug-company profits, and increased use of related conduct such as brand-generic settlements and product hopping. As a tool that is being used more frequently and that has evaded attempts to limit its abusive potential, citizen petitions warrant scrutiny.
Keywords: citizen petitions, pharmaceutical, patent, antitrust, FDA, generics
JEL Classification: I18, K21, L40, L41, L43, L65, O38
Suggested Citation: Suggested Citation
Carrier, Michael A. and Wander, Daryl, Citizen Petitions: An Empirical Study (June 3, 2012). Cardozo Law Review, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2074656
By D. Sokol
By John Newman