Beyond Competitive Advantage – Who should be trusted to distribute a product requiring a REMS?

As discussed in the New England Journal of Medicine on April 17, 2014 by Sarpatwari, Avorn, and Kesselheim, REMS are being used as a source of competitive advantage by some pharmaceutical companies.

Researchers from the Brigham and Women’s Hospital and Harvard Medical School published a Perspective in the New England Journal of Medicine (NEJM) describing possible outcomes resulting from intellectual property protection afforded to Risk Evaluation and Mitigation Systems (REMS).  The Perspective cited an example whereby a manufacturer chose not to violate their REMS obligations by providing drug to a generic drug manufacturer.  A second example described a manufacturer’s assertion that its REMS-enabled patent protection may be infringed in certain ways by a generic offering.

Stepping away from the legal details of these cases, three points about REMS may be helpful to consider when thinking through the future of the obligations and protections in this area.

First – REMS program development and execution is extremely resource intensive, both from a financial and human capital perspective.  Much time and energy is spent developing and executing these programs.  This is a labor of love (the program allows patients to benefit from needed products that might otherwise not be approved) and a necessity for a pharmaceutical manufacturer but the resource requirements are enormous.

Second (and I am going out on a limb here) – as rigorous and standardized as REMS programs are in terms of training, documentation, and decision making, there are many subjective elements left to interpretation.  Many key decision points rely on clinical judgment.  Such judgment often arises from collaborative team discussions within product teams in clinically and scientifically motivated pharmaceutical companies.

Third is a point that was made in the NEJM Perspective and commonly accepted is that a REMS is a required condition for products that have risks which would outweigh potential benefits in the absence of the REMS.

In our view, generics manufacturing is a business involving more legal skill; sophisticated manufacturing capabilities; and hospital account contracting than medical judgment; clinical decision-making skills; and patient-centricity.  Generic sales is a lower profit-margin business than branded pharmaceutical sales which requires generic companies to temper investment in areas not directly linked to return or to a broader mission.

Putting this all together, I am not yet convinced it makes sense for the healthcare system to place its highest risk products into the hands of the generics industry, even with a shared REMS in place.  Our view is that REMS is more than just a program to be implemented as a commodity layered onto generics manufacturing and distribution.  We believe that REMS serves as a marker for a high quality, multi-stakeholder safety system in place to ensure safety of patients exposed to high-risk products, including by means that are not part of the REMS itself.

Until we are able to tease out the intangible elements required to ensure safety of patients, we would prefer to leave the distribution of REMS-requiring products to companies that have demonstrated that they are motivated and willing to invest in designing and implementing a REMS.