Posted by Social Science Research Network
Sharing, Samples, and Generics: An Antitrust Framework
By Michael A. Carrier (Rutgers Law School)
Abstract: Rising drug prices are in the news. By increasing price, drug companies have placed vital, even life-saving, medicines out of the reach of consumers. In a recent development, brand firms have prevented generics even from entering the market. The ruse for this strategy involves risk-management programs known as Risk Evaluation and Mitigation Strategies (“REMS”). Pursuant to legislation enacted in 2007, the FDA requires REMS when a drug’s risks (such as death or injury) outweigh its rewards. Brands have used this regime, intended to bring drugs to the market, to block generic competition. Regulations such as the federal Hatch-Waxman Act and state substitution laws foster widespread generic competition. But these regimes can only be effectuated through generic entry. And that entry can take place only if a generic can use a brand’s sample to show that its product is equivalent.
More than 100 generic firms have complained that they have not been able to access needed samples. One study of 40 drugs subject to restricted access programs found that generics’ inability to enter cost more than $5 billion a year. Brand firms have contended that antitrust law does not compel them to deal with their competitors and have highlighted concerns related to safety and product liability in justifying their refusals. This Article rebuts these claims. It highlights the importance of samples in the regulatory regime and the FDA’s inability to address the issue. It shows how a sharing requirement in this setting is consistent with Supreme Court caselaw. And it demonstrates that the brands’ behavior fails the defendant-friendly “no economic sense” test because the conduct literally makes no sense other than by harming generics.
Brands’ denial of samples offers a textbook case of monopolization. In the universe of pharmaceutical antitrust behavior, other conduct — such as “pay for delay” settlements between brands and generics and “product hopping” from one drug to a slightly modified version — has received the lion’s share of attention. But sample denials are overdue for antitrust scrutiny. This Article fills this gap. Given the failure of Congress and the FDA to remedy the issue, antitrust can play a crucial role in ensuring generic access to samples, affirming a linchpin of the pharmaceutical regime.
Featured News
Judge Mehta Questions Both Sides in Landmark Google Antitrust Case
May 2, 2024 by
CPI
FCC Urges Urgent Funding for Removal of Chinese Telecom Equipment from U.S. Networks
May 2, 2024 by
CPI
Former Pioneer CEO Facing Potential Criminal Charges For Colluding With OPEC
May 2, 2024 by
CPI
South Korea’s Antitrust Regulator Greenlights K-Pop Powerhouse Deal
May 2, 2024 by
CPI
Exxon’s Pioneer Purchase Approved, Former CEO Barred from Board
May 2, 2024 by
CPI
Antitrust Mix by CPI
Antitrust Chronicle® – Economics of Criminal Antitrust
Apr 19, 2024 by
CPI
Navigating Economic Expert Work in Criminal Antitrust Litigation
Apr 19, 2024 by
CPI
The Increased Importance of Economics in Cartel Cases
Apr 19, 2024 by
CPI
A Law and Economics Analysis of the Antitrust Treatment of Physician Collective Price Agreements
Apr 19, 2024 by
CPI
Information Exchange In Criminal Antitrust Cases: How Economic Testimony Can Tip The Scales
Apr 19, 2024 by
CPI