Mylan, the generic drug company, is suing Celgene. The issue is Celgene’s use of its REMS programs to deny Mylan to purchase Celgene’s drugs, which Mylan needs to develop generic versions. REMS programs are FDA mandated and approved in order to ensure that access to some drugs is restricted when use in some populations poses unusual risks. In the case of Celgene’s drugs, the REMS programs are designed to insure that the drugs are not dispensed to women who are pregnant or may become pregnant while taking the drugs. This is a significant move by the FTC against the increasing use of REMS programs to thwart generic competition. Obviously the use of the drugs in bioequivalence testing by Mylan should take all necessary precautions to avoid exposing pregnant women to the drug, but that is not really Celgene’s objective. The FTC’s brief is here. Let us hope the FTC’s position prevails in this case.
In this post I will speculate very briefly about an important new development reported by Andrew Pollock of The New York Times. The subject of Pollock’s articleis how health insurers at long last appear to be putting real pressure on drug prices. Though readers of this blog will not be surprised by the discussion of how drug companies price their drugs and avoid competing on price, the heart of Pollock’s story is the recent efforts of pharmaceutical benefit managers(PBMs) to use their formularies to reduce insurers’ prescription drug costs. There has always been some use of formularies to negotiate prices: but, according to Pollock, such efforts have now greatly increased. The article highlights how PBMs are restricting their formularies much more than in the past and drug companies are confronted with the choice of reducing their prices or finding themselves excluded from coverage for most of an insurer’s patients.