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Novel Tactics Impede Generic Competition to Suboxone Tablets

Health Letter, February 2013

When a brand-name drug’s patent or exclusivity period expires, opening the door to competition by generic drugmakers, sales of the brand-name drug often dramatically and quickly dwindle, typically declining around 80 percent or more within six months. To avoid this outcome, pharmaceutical companies faced with a drug’s patent expiration or with new generic competition have employed an assortment of unethical if not illegal tactics to extend their profits long after legal monopoly has faded. Such strategies have traditionally included frivolous lawsuits against would-be generic competitors; new patent applications for almost identical drug formulations; and so-called “pay for delay” deals with potential competitors, in which the manufacturer of a branded drug pays off one or more generic drug companies to delay the introduction of generic formulations. (The legality of this particular anticompetitive practice will be addressed by the U.S. Supreme Court later this year.)

But few, if any, companies have gone as far as to pre-emptively withdraw an off-patent drug from the market to make way for a newly patented successor in the way that British-based Reckitt Benckiser Pharmaceuticals did in September 2012. Claiming a concern for children’s safety, the company abruptly announced that it was discontinuing the widely used buprenorphine/naloxone (Suboxone) tablets, which treat addiction to heroin and opioid painkillers, in favor of a new format: a film that, like the tablet, dissolves under the tongue. The move raised concerns regarding both the company’s true motives and the resulting difficulties presented for patients needing access to the life-saving medication.

Dubious motives

Reckitt recently commissioned the Rocky Mountain Poison and Drug Center (RMPDC) to investigate the risk of pediatric exposure from Suboxone tablets relative to its newly patented Suboxone film formulation. In its decision to withdraw the tablets from the market, Reckitt cited the RMPDC study’s results, which showed that children could be accidentally harmed by easy access to Suboxone tablets marketed in bottles. The company focused on the study’s finding that its film version, sold as individual units wrapped in blister packaging, was eight times less likely to be ingested by children than the tablet version packaged in bottles containing up to 30 tablets. The RMPDC’s director, Dr. Richard Dart, explained that this was most likely because the film’s blister packaging was more difficult for children to open, with fewer doses accessed each time, than the tablets’ bottle packaging.

“Reckitt Benckiser Pharmaceuticals has a moral obligation to act as quickly as possible on safety data relating to its products,” a company spokesman told Forbes. The spokesman noted that a risk-management strategy including patient education had been in place since 2003 to minimize accidental exposure to children.

Some critics asked why the company had waited so long to take such a drastic measure, when the rate of pediatric exposure to Suboxone tablets had been increasing for years prior to the September 2012 announcement from Reckitt. Others asked why, given the study’s findings that unit-dose packaging could mitigate much or possibly all of the risk of the tablet version, Reckitt didn’t simply change the tablets’ packaging.

Reckitt offers unit-dose, child-resistant blister packaging for Suboxone in non-U.S. markets, including Canada and the United Kingdom. However, the company claimed that the Food and Drug Administration (FDA) approval process necessary to introduce the same packaging in the U.S. would have taken too long. It also cited “technical issues involving the integrity of the tablet when attempting to remove it from the packaging,” an issue apparently overcome in other markets. Although Reckitt admitted that “later studies revealed that unit-dose packaging of Suboxone may be feasible [in the U.S.],” the company instead “focused its resources on the development of Suboxone Film.”

In October 2009, Reckitt lost its exclusive marketing rights for the Suboxone tablet. The company’s 2011 annual report stated that “… up to 80 percent of the revenue and profit of the Suboxone tablet business in the U.S. might be lost in the year following the launch of generic competitors, with the possibility of further erosion thereafter.” Its September 2012 announcement to withdraw Suboxone tablets from the market came one year before, observers say, the company widely expected generic competitors to enter the market, in 2013. (No generics have yet been introduced.)

“They are (removing the tablets) because generics are expected in 2013 on the tablet,” Sanford Bernstein analyst Ronny Gal told Ed Silverman, a reporter on the pharmaceutical industry, in Forbes. “The critical question is whether their argument that film is always safer for children will convince [the FDA] not to approve any oral solid generic.”

The company formally denied any link between the possibility of generic competition and its decision to abruptly phase out the tablets.

Transitioning patients: traditional and novel tactics

A year before the withdrawal of the tablets, Reckitt stated in its 2011 report that its goal was to “support conversion” of as many tablet users as possible to the film formulation. To this end, the company initiated a marketing campaign to persuade physicians to switch patients from the tablet to film form. It also employed more direct tactics to complement the marketing push, raising the price of the tablets to levels higher than the film versions. As a result of these efforts, tablet sales fell 19 percent between August 2011 and August 2012, while sales of Suboxone film doubled during the same period. By September 2012, the film version had captured 70 percent of the Suboxone market, clearing the way for the announcement of the withdrawal of the tablets that month.

With its own tablets removed from the market, the company also moved to prevent any other tablet formulation from competing with its new film version. On the day of its announcement of the withdrawal of Suboxone tablets from the market, Reckitt filed a Citizen’s Petition with the FDA requesting that the agency not approve any other tablet formulation of Suboxone unless the generic manufacturer implemented “national public health safeguards involving pediatric exposure educational campaigns and child-resistant, unit-dosed packaging to reduce the risk of pediatric exposure.” While few disagreed that these precautions would be desirable, critics quickly noted that generic manufacturers had, in fact, been trying to implement these measures for months, with Reckitt stifling their efforts.

In 2011, the FDA had already mandated that, as a condition of approval, interested generic manufacturers must devise a risk evaluation and mitigation strategy (REMS), with some of the components referred to in Reckitt’s petition, to mitigate pediatric risks. However, the agency required the creation of a single, industry-wide REMS and mandated that all potential generic makers must work through Reckitt, as the manufacturer of the brand-name drug, to devise the program. This ensured that generic manufacturers would depend on Reckitt’s cooperation in devising the REMS.

Generic manufacturers complained that Reckitt subsequently dragged its feet, with little to no progress made on the unified REMS necessary to bring a new generic Suboxone tablet to market. “There are many components in their REMS, and these can be very stringent, but Reckitt won’t tell us what they are. They’ve seized upon this and used the situation to their advantage. And no progress has been made,” one industry source told Forbes. Reckitt denied obstruction of the process, claiming that it was “actively engaged in these multiparty discussions.”

That the FDA preferred a single, standardized REMS, and that it relied on Reckitt, the only manufacturer of Suboxone at the time, to devise such a program, was reasonable. However, there is no indication that the FDA has either criticized or pressured Reckitt since that time regarding the company’s apparent refusal to cooperate with the generic makers. The FDA has 180 days from the petition’s submission to respond to Reckitt’s petition (as of Jan. 16, 2013, there has been no response), and it remains to be seen whether the agency will grant the company’s request in light of the lack of any progress by the company on a REMS.

Profits over patients

For all the talk of its concern for public health, Reckitt is apparently less concerned with how its decision to effectively extend its monopoly on Suboxone for another 10 years will affect access to its medication.

The replacement of the tablet with a film version that will remain under patent until 2022 creates a major financial barrier for Suboxone patients who may be unable to continue paying monopoly prices for the new formulation. (According to a Reckitt spokesperson, the wholesale average cost for a bottle of 30 Suboxone tablets as of October 2012 ranged from $161.70 for the 2-milligram (mg) dose to $289.80 for the 8-mg dose, and a 30-day supply of Suboxone film runs from $117.85 for the 2-mg dose to $211.15 for the 8-mg dose. Generic versions of drugs typically cost around 75 percent less than brand-name drugs.)

Patients who cannot currently afford the Suboxone tablet to treat addiction to heroin and opioid painkillers but could potentially afford generic versions will continue to face the same financial barriers with the new film version. The move will similarly cost Medicaid, which covers many poor patients on Suboxone for opioid addiction, at a time when the public health insurance program faces the prospect of increasing cuts by financially strapped state governments.

Furthermore, continued access to Suboxone is more critical than ever. The epidemic of addiction to opioid pharmaceuticals is now at an all-time high, with the number of deaths due to opioid overdoses tripling from 2000 to 2009. More than 15,000 people died from accidental opioid overdoses in 2011, now dwarfing deaths from heroin abuse, which have held steady.

It remains to be seen how long Reckitt can continue to shrewdly fend off generic competition. Whatever the outcome, the tenacity of the company makes strikingly clear the lengths to which brand-name drug manufacturers will go to preserve their monopoly profits on life-saving medicines. As the number of truly innovative drugs continues to decline, some of the most innovative output emerging from the modern-day drug industry seem to be an ever-evolving arsenal of tactics wielded to stifle generic competition.