Feds: Drug Company Delayed Cheaper Generics By Flooding The FDA With Paperwork

Given that a brand-name prescription drug stands to lose a significant chunk of its market share once a lower-price generic becomes available, you can understand why a drug company would want to do anything it can to delay the cheaper alternative, even if you disagree with their intentions. We’ve seen companies accused of paying millions to stave off competition through alleged “pay for delay” deals, and we’ve also seen examples of “product hopping” to prevent competitors from entering the field. Now here’s another method for keeping generics off the market: allegedly flooding the Food and Drug Administration with pointless paperwork.

In 2004, a small Pennsylvania-based drug company called ViroPharma acquired the rights to an antibiotic called Vancocin (vancomycin hydrochloride) from Eli Lilly. While intravenous vancomycin is considered a drug of last resort for treating bacterial infections, Vancocin capsules are often used to treat potentially deadly diarrhea associated with Clostridium difficile infections.

Within seven years — between price hikes and increased demand for the drug — Vancocin sales revenue soared from $40 million a year to nearly $300 million by 2011.

During this time, the drug had no generic equivalent on the market, but not for lack of interest from drug makers. Additionally, Vancocin wasn’t a new drug — its patent protection and exclusivity period had long expired — so it should have been rather easy for a competitor to produce a competing generic.

The only thing holding competitors back at the time was an FDA requirement that a generic would need to be tested on actual human beings to demonstrate it was bioequivalent to Vancocin (i.e., that they are the same drug as far as the patient’s body is concerned). Then in Feb. 2006, after reviewing a request from one generic company, the FDA determined that it could accept a less expensive and time-consuming way of showing bioequivalence.

That’s when, according to a lawsuit [PDF] filed today by the Federal Trade Commission, ViroPharma began inundating the FDA with paperwork allegedly intended to keep this generic from reaching consumers.

See, when a drug maker wants to release a generic version of an existing medication, it files an Abbreviated New Drug Application (ANDA) with the FDA. However, the brand-name company can challenge an ANDA by filing a citizen petition with the government.

Starting in March 2006 and continuing until April 2012, notes the lawsuit, ViroPharma submitted 24 different citizen petitions about Vancocin, repeatedly halting the ANDA approval process. In 2007, Congress updated the law regarding citizen petitions so that the FDA was no longer obligated to press pause on its review of generic drug applications, but that change only applied to petitions first filed in 2007 or after. Since the first ViroPharma petitions were filed in 2006, they had the effect of slowing down the review for years, claims the FTC.

In addition to the petitions, the complaint notes that ViroPharma filed 17 public comments regarding the bioequivalence standard for generic Vancocin, another public comment about the FDA’s process for publishing bioequivalence guidelines, and three separate lawsuits against the agency (two of which were dismissed, and one that was withdrawn by ViroPharma).

Despite a requirement that it back up the claims in these petitions with scientific data, the FTC contends that “ViroPharma continued to submit filing after filing without any supporting clinical data,” with promises that it would “shortly submit scientific evidence.”

One petition — number 11, according to the FTC’s count — suddenly claimed that the ViroPharma version of Vancocin contained a previously unrevealed “trade secret” inactive ingredient that might affect the drug’s performance. Once again, the company failed to provide any evidence to support this claim.

These filings continued, claims the complaint, even after a 16-member advisory panel rejected the company’s position. “Instead, ViroPharma repeated arguments that it had previously made, raised issues or arguments it could have raised earlier, submitted filings whose success it characterized as a and made requests that the FDA would later deem an ‘improper use of the citizen petition process.'”

In 2010, as a generic version of Vancocin was finally nearing entry, ViroPharma filed a supplemental new drug application (sNDA) with the FDA, claiming it was entitled to a three-year period of marketing exclusivity. The company repeated this claim in Dec. 2011 in its 24th and final citizen petition.

Finally, in April 2012 the FDA issued a lengthy rejection of all of ViroPharma’s scientific and legal claims. This led to the FDA approving multiple generics for Vancocin.

“All told, ViroPharma made 165 requests for administrative action in its citizen petition filings,” reads the complaint. “The FDA denied or deemed improper the vast majority of ViroPharma’s requests for administrative action. Further, the FDA rejected ViroPharma’s scientific arguments as ‘unsupported’ and found them to ‘lack merit.'”

While the market for Vancocin finally opened up in 2012, the FTC contends that ViroPharma enjoyed years of monopoly control for the drug that it would not have had if it weren’t for the mountain of paperwork it filed with the FDA. As a result, the lawsuit claims that American consumers paid hundreds of millions of dollars more than they would have if the generics had been approved when they were supposed to be.

“ViroPharma’s repetitive, serial, and meritless petitioning harmed competition and consumer welfare by obstructing and delaying the FDA approval process for a generic version,” argues the lawsuit. “Each time the FDA was close to finalizing its response to ViroPharma’s filings and contemporaneously approving generic Vancocin Capsules, ViroPharma would submit another filing, often raising issues that ViroPharma itself doubted or that it could have raised earlier and/or repeating issues raised earlier.”

Dublin-based Shire acquired ViroPharma three years ago, and sold off its interest in Vancocin in Aug. 2014.

In a statement emailed to Consumerist, Shire contends that, because of this timeline and its lack of involvement with Vancocin, Shire “played no role in ViroPharma’s challenged petitioning, which took place between 2006 and 2012.”

That said, Shire still maintains that this lawsuit is “wholly without merit.”

“ViroPharma’s actions were in furtherance of its fundamental right to petition the government, which is guaranteed and protected by the First Amendment, and raised legitimate issues with the FDA involving complex scientific questions that had significant public health implications,” explains Shire.