REMS and Brand-Generic Negotiations

The Food and Drug Administration (FDA) requires companies applying for FDA approval of new, yet potentially dangerous drugs to impose safety protocols, known as Risk Evaluation and Mitigation Strategies (REMS), on their use. These safety measures may be used as a means of keeping competitors out of the market, causing controversy within the pharmaceutical industry.

The ability to increase drug safety by limiting who may prescribe or purchase dangerous drugs with REMS has had the effect of erecting a barrier for generic drug manufacturers. The requirement that brands share their REMS with generic manufacturers has also created an opportunity for brand manufacturers to delay their competition’s entrance into the market by drawing out negotiations over the exchange of intellectual property. One study estimated that up to $5.4 billion in drug savings is lost annually because of delayed market availability of generic drugs.

The fact that an increasing number of newly approved drugs are accompanied by REMS requirements should lead Congress to reconsider the impact REMS misuse can have on patients’ access to therapies and amend current law accordingly.

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