By Kurt R. Karst –
The Wachowski Brothers’ Matrix Trilogy of movies depict a post-apocalyptic world in which reality is not what it seems. The reality most people perceive is actually a simulated reality created by sentient machines – a dream world created by virtue of a “reboot” of humanity. Those humans have no recollection of “real history” and the break from “true reality.” The true reality is that the machines have taken over the world and have subdued humanity to harvest its energy. Only a few humans have broken free from the simulated reality, and they rebel against the machines. Computer programmer “Neo” is given the option to join the rebellion. But to do so he must make a choice: take a red pill and know the painful truth of reality, or take the blue pill and be blissfully ignorant of the illusion. Of course, Neo takes the red pill and the story moves on.
We were reminded of the Matrix Trilogy when we sat down and read the Generic Pharmaceutical Association’s (“GPhA’s”) Overview and Assessment of FDA’s November 2013 proposed rule. There, FDA proposes to allow generic drug manufacturers to independently update product labeling (with respect to product safety) through the changes being effected (“CBE-0”) supplement process that is currently only available to brand-name drug manufacturers whose products are approved under an NDA.
FDA’s proposal has generated quite a bit of attention, and it will continue to do so. It’s not only GPhA’s top priority in 2014 (see here), but several lawmakers recently chimed in expressing “grave concerns” with the proposal (see our previous post here), saying that it “conflict[s] directly with the statute, thwart[s] the law’s purposes and objectives, and impose[s] significant costs on the drug industry and healthcare consumers.” In other words, FDA’s proposal is a departure from the “true reality” industry has known for decades; a reboot of the generic drug industry in a world created by, what some proponents of the FDA proposal might say is the apocalyptic decision made by the U.S. Supreme Court in PLIVA, Inc. v. Mensing, 131 S. Ct. 2567 (2011). Indeed, FDA says as much in the preamble to the proposed rule:
At the time of FDA’s adoption of the generic drug regulations in 1992, FDA believed it was important that product labeling for the RLD and any generic drugs be the same to assure physicians and patients that generic drugs were, indeed, equivalent to their RLD. However, as the generic drug industry has matured and captured an increasing share of the market, tension has grown between the requirement that a generic drug have the same labeling as its RLD, which facilitates substitution of a generic drug for the prescribed product, and the need for an ANDA holder to be able to independently update its labeling as part of its independent responsibility to ensure that the labeling is accurate and up-to-date. In the current marketplace, in which approximately 80 percent of drugs dispensed are generic . . . FDA believes it is time to provide ANDA holders with the means to update product labeling to reflect data obtained through postmarketing surveillance, even though this will result in temporary labeling differences among products. . . .
The Mensing decision alters the incentives for generic drug manufacturers to comply with current requirements to conduct robust postmarketing surveillance, evaluation, and reporting, and to ensure that the labeling for their drugs is accurate and up-to-date.
But as GPhA, which has clearly chosen the “red pill,” says in its comments, FDA’s proposal is unjustified and unwarranted, and would wreak havoc on the generic drug industry:
It is difficult to overstate the implications of the Proposed Rule on the generic pharmaceutical industry. The Proposed Rule creates the regulatory framework whereby multiple, different labeling, including different warnings, can simultaneously exist in the marketplace for the “same” drug. The confusion that will be created among health care professionals will undermine FDA’s longstanding, unwavering emphasis on consistency in drug labeling. The confusion that will ensue has obvious implications for public health, which FDA has not addressed in its Proposed Rule. FDA also did not conduct a robust cost/benefit analysis, and attempts to minimalize the potential that the Proposed Rule, if adopted, very likely will result in defensive labeling. FDA also failed to recognize that adoption of the Proposed Rule may result in under-adoption of safe and effective generic drugs that improve lives and reduce healthcare costs, fewer generic drugs coming to market, manufacturers withdrawing from certain markets, drug shortages, and increased expense of drugs − all antithetical to the basic purposes of the [1984 Hatch-waxman Amedments].
But there is some hope. While GPhA says unquivocally that the organization “cannot support a proposed rule that undermines public health merely to facilitate litigation against generic drug companies by the plaintiffs’ bar,” GPhA does recognize the importance of maintaining up-to-date safety labeling – just not in the chaotic world that could result from FDA’s proposal. Instead, GPhA says that the organization “supports a modification of the process that would explicitly allow generic firms to actively assist FDA in its determination that a change to labeling based on new safety information is warranted and in an efficient and prompt review of proposed changes by FDA. . . . The GPhA fully supports an expedited communication process through which FDA can notify both generic and brand-name drug companies, as well as healthcare practitioners of potential new safety information.” In other words, GPhA says, let’s stick with and improve upon the operating system that’s been in place now for almost 30 years. There’s no need (or justification) for a “reboot.”
- Our reference to the Matrix Trilogy of movies appears to have been prescient. On February 5th, Matrix Global Advisors, a Washington, DC-based economic consulting firm led by Alex Brill, released an economic assessment concluding that FDA's generic drug labeling proposal, if implemented, would result in an estimated $4 billion in additional U.S. health care costs annually.