Any “forced sale” of products would also be constitutionally questionable as an unprecedented intrusion into the marketplace because the government would be compelling a commercial transaction that does not involve a willing seller and a willing buyer.  The innovator company could even face liability if patients were harmed by a drug provided to them by a generics company to whom it was forced to sell.

The 21st Century Cures project, led by Energy and Commerce Committee Chairman Fred Upton (R-MI) and Rep. Diana DeGette (D-CO), is an extraordinarily important endeavor that recognizes the need to modernize our regulatory structure if we are to achieve the major promises of 21st century medicine.

“If we want to save more lives and keep this country the leader in medical innovation, we have to make sure there’s not a major gap between the science of cures and the way we regulate these therapies,” the House Energy and Commerce Committee explains. “We are looking at the full arc of this process – from the discovery of clues in basic science, to streamlining the drug and device development process, to unleashing the power of digital medicine and social media at the treatment delivery phase.”

Over the last year, the committee has gathered recommendations from expert witnesses and consumers around the country during dozens of working sessions and round tables, and has worked hard to garner bi-partisan support for the plan.  The first committee mark-up session is scheduled for tomorrow, and Chairman Upton hopes to get a bill to the floor early this summer.

We will examine in a subsequent post the many good provisions of the legislation, but one stands out that the committee would be well advised to avoid.

The controversial provision is referred to as “forced sale,” and it strikes at the heart of patient safety.

Here is the back story: In 2007, Congress gave the Food and Drug Administration authority to work with drug developers to develop Risk Evaluation and MitigationStrategies (REMS) programs to help manage drugs with known, potentially serious risks, such as organ damage, serious infection, or birth defects.  The strictest REMS protocols could require the developer to keep a registry of all patients taking the drug, to certify all prescribers and dispensers of the drug, to counsel patients to assure compliance with the protocols, or restrict distribution in the interest of patient safety.

Generic drug manufacturers want the Energy and Commerce Committee to include in the Cures legislation a new requirement for high-risk drugs that have distribution restrictions.  The proposal would force innovator companies to sell their drugs to generic competitors without imposing similar safety obligations on them.

The drug thalidomide is an example of a drug with a strict REMS protocol. Thalidomide was given to pregnant women, primarily in Europe in the 1950s, to alleviate morning sickness but was found to be responsible for several thousand serious birth defects. Thalidomide led to public demands that drug companies demonstrate a drug’s safety before it could be introduced into the market.

Half a century later, after extensive clinical trials, thalidomide was found to be an important therapy for patients with multiple myeloma by impeding the growth of cancerous cells and reducing their ability to crowd out healthy cells.  The drug was allowed onto the U.S. market, but a strict REMS program was required by the FDA to guard against any risk of fetal exposure.  The REMS program requires a patient registry, a negative pregnancy test for women of child- bearing age prior to dispensing, counseling for both men and women about using multiple forms of birth control, and certification for prescribers and dispensers.

Thalidomide, which was developed by Celgene CELG -0.58%, is not alone as a high-risk drug with restricted distribution.  Small molecule drugs such as Vivus’ Qsymia for weight loss, and Jazz Pharmaceutical’s Xyrem for narcolepsy (commonly referred to as GHB, its chemical abbreviation or the “date rape” drug) have REMS with restrictions on distribution, as do newer biological drugs like Tysabri, Biogen’s blockbuster multiple sclerosis therapy, or Alexion’s Soliris, a unique treatment for ultra-rare disorders.

As the patents on these drugs reach expiration, other companies seek to develop generic versions, and they need samples for testing in order to develop their copies.  Rather than going through wholesalers or other conventional channels as they would with ordinary drugs and biologics, a generic manufacturer has to negotiate the terms of sale with the innovator company.  These marketplace negotiations involve discussions not just about the price and quantity, but also whether the generic manufacturer can follow protocols to ensure patient safety.

Generic drug companies argue that innovator companies use REMS programs to make it difficult or impossible to acquire drug samples, thereby slowing generic drug development.  They say Congress should compel companies to sell their drugs to any interested generic company, accelerating market entry of the generic copies and leading to cost savings on drug spending for patients in Medicare and other government programs.

But high-risk drugs are being bought and sold now between innovators and generic companies.  Of the 40 drugs with the most restrictive requirements to follow REMS protocols, more than half either have been sold to generic companies or a new generic drug application has been filed.  Indeed, the system seems to work as the REMS law intended.

And, there are other safeguards in place.  The federal law authorizing REMS programs expressly bars innovative companies from using REMS restrictions to block generic competition.  And the FDA has recognized the need for special safeguards regarding high-risk REMS drugs by issuing detailed guidance last December to help support the sale of these drugs to generic companies.  Congressional intervention would override the FDA’s balanced protocols.

For the remaining drugs, existing laws and regulatory structures are in place for disputes between generic and innovator companies.  The FDA can use its new guidance and also encourage both parties to arrive at a contractual agreement.  If necessary, the FDA can refer the dispute to the Federal Trade Commission (FTC), which has well-established mechanisms mandated by Congress to deal with unfair restraint of trade.

Any “forced sale” of products would also be constitutionally questionable as an unprecedented intrusion into the marketplace because the government would be compelling a commercial transaction that does not involve a willing seller and a willing buyer.  The innovator company could even face liability if patients were harmed by a drug provided to them by a generics company to whom it was forced to sell.

Innovators do not choose REMS programs.  If one of these high-risk drugs is going to be marketed, the REMS program is required by the FDA, and the protocols are reviewed annually.  Forcing the sale of these drugs to companies that cannot assure patient safety with such complex products would endanger public health.

If another thalidomide baby were to be born, the FDA would surely pull the product from the market – at least for a time – and cancer patients who need the drug would be denied access to this important therapy. Patients would be harmed, and another miracle drug would be lost.

Forcing brand name companies to sell their drugs to generics companies also would reduce incentives for future drugs to be developed.

The 21st Century cures project offers a wealth of positive ideas.  It would be unfortunate if the committee were to include this forced-sale provision without a complete congressional examination of the many potential adverse consequences for innovation and drug safety.

The above was originally published at on May 13, 2015.

Grace-Marie Turner is president of the Galen Institute (, a non-profit research organization focusing on market-based health policy solutions.

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