REMS: The Next Pharmaceutical Enforcement Priority?
9 Pages Posted: 28 Mar 2014
Date Written: 2014
Under the Food and Drug Administration Amendments Act of 2007, the FDA can require the use of risk evaluation and mitigation strategies (REMS) over and above professional labeling, to ensure that a drug’s benefits outweigh its risks. The FTC and the generic drug industry have raised concerns that branded drug companies are using REMS-mandated distribution restrictions to inappropriately limit access to product samples that generic drug developers need for bioequivalence testing, a predicate for FDA approval of generic drugs.
Though the FTC has not yet brought an enforcement action, the agency has identified REMS misuse as an enforcement priority, has opened several investigations, and has filed an amicus brief in private litigation explaining its concerns. For their part, generic drug companies have filed several antitrust claims against branded drug companies and raised their concerns with the FDA. Two district courts have permitted these claims to proceed, but the extent to which the antitrust laws require branded drug companies to provide generic firms access to product samples for REMS-restricted drugs remains unclear.
In this article, we discuss whether a refusal to supply a REMS-restricted drug to a generic drug developer is a form of exclusionary conduct under Section 2 of the Sherman Act, as well as potential justifications for a branded company’s refusal to deal. Given the FTC’s interest in this issue, we also address whether a refusal to provide REMS-restricted product samples to a generic drug company could raise concerns under Section 5 of the FTC Act.
Keywords: REMS, FTC, FDA, antitrust, competition, Sherman Act, FTC Act, refusal to deal, Trinko
JEL Classification: I18, K21, K23, L40, L41, L42, L43, L44, L49
Suggested Citation: Suggested Citation