How Pharma Companies Use 'Citizen Petitions' to Keep Drug Prices High

Ninety-two percent of citizen petitions filed against generics come from brand-name drug companies.

In theory, citizen petitions about drug safety are supposed to be exactly what they sound like: a way for anyone to bring concerns straight to the Food and Drug Administration.

In practice, many citizen petitions are filed by none other than pharmaceutical companies themselves—as a way of fighting off a competitor’s cheaper generic drug. The concerns raised, according to a New England Journal of Medicine study of 12 years of such petitions, are often “frivolous or questionable,” no more than a “last-ditch effort to hold off competition.” The FDA takes months to respond to the petitions, which have gotten lengthier and more frequent over the past decade.

Consider a few examples:

• Between 2006 and 2012, ViroPharma filed 24 citizen petitions with the FDA to delay the approval of generic versions of Vancocin, an antibiotic. That was in addition to  its 18 public comments, a new drug application supplement, and three lawsuits against the FDA—all over a drug first approved in 1986.

• In 2007, Mutual Pharmaceuticals filed a petition raising concerns about other generic manufacturers’ versions of the blood pressure drug Plendil. The petition asked the FDA to determine what type of orange juice had been used in studies analyzing its interactions with the drug. Seville oranges, which are more bitter, might have different effects than regular orange juice.

• In 2015, about a year before EpiPen prices created a public firestorm, Mylan filed a petition alleging that a generic version of the EpiPen in the works had a 93 percent failure rate. Mylan commissioned the study that came up with statistic, which an outside expert called “flawed from start to finish.”

At a time when the headline-grabbing antics of, say, Martin Shkreli, have highlighted rising drug prices, citizen petitions are a stealthier and innocuous-sounding way for companies to keep out competitors. It’s part of the usual, to use an industry term, “product lifecycle management.” Patents grant exclusive rights to companies as an incentive to develop new drugs. But once a drug patent has expired, the incentive is then to be creative about keeping out generic competitors.

Gaming the FDA’s citizen petition this way puts the agency in a tricky spot. “The FDA’s number one job is safety. That’s what they’re good at. They’re not designed as a competition policing agency,” says Robin Feldman, a law professor at UC Hastings and a co-author of the paper. For example, the FDA can summarily deny petitions that it finds frivolous—but it never has. The agency tends to err on the side of caution because the consequences of approving an unsafe drug are so high.

According to a study last year, brand-name pharma companies filed 92 percent of 505(q) citizen petitions, a specific type related to pending generic applications. And in turn, 92 percent of those petitions were ultimately rejected by the FDA.

For its part, the FDA is is aware of a problem. In its last annual report to Congress about citizen petitions, the agency wrote it was concerned that current law “may not be discouraging the submissions that are intended primarily to delay the approval of competing drug products and do not raise valid scientific issues.” (The FDA declined to comment specifically for this story.)

The scope of the problem is bigger than the FDA. Michael Carrier, a law professor at Rutgers, who has also studied the citizen petition process, noted that the issue sits at the junction of several areas of law: antitrust law, patent law, state drug laws, and the Hatch-Waxman Act that set up the generic approvals system. “When it gets really complicated,” he said, “there’s a chance to play in all those joints and have anticompetitive conduct.”

Carrier cites EpiPens has an example of where Mylan used multiple delay tactics against a competitor. First, Mylan and Teva, the company seeking to make a generic EpiPen, settled a lawsuit in 2012, in which Teva agreed not to enter the market until June 2015. Months before the settlement period was supposed to end, Mylan filed a citizen petition about Teva’s product. Then, weeks before the FDA was supposed to respond to that petition, it filed a supplement containing the Mylan-commissioned study questioning Teva’s version. Carrier notes that Mylan waited years to file its citizen petition. The last-minute timing raised his suspicions.

In a statement, a Mylan spokesperson said, “Our concern is that the product doesn’t meet the standards for being approved as a generic version of the EpiPen Auto-Injector. For that reason, we submitted a petition, which is a public process that gives anyone with a view the opportunity to voice an opinion by submitting comments, and puts the decision in FDA’s hands, where it belongs. For the record, FDA denied our petition.” (Teva’s generic EpiPen has since been delayed for other reasons. It does not expect to have a product out until late 2017 or 2018.)

Erika Lietzan, a law professor at the University of Missouri who previously specialized in FDA regulation in practice private, said that companies filing petitions regarding their competitors is not in itself troubling. “If it’s an innovative product,” she said, “it may be the company that developed and has been making it for years is in a position to have insights into the science or manufacturing issues that others wouldn’t. So if anything, I almost think, those are the right people to be filing them.” The petitions can be an avenue for legitimate scientific and legal concerns.

While Lietzan did not dispute that companies file these petitions with financial motivations in mind, she did not think the evidence was clear that the petitions delay approval of generics. Feldman and Carrier, in their studies, consider instances where the FDA denied a petition and approved a generic drug on the same day as evidence of delay. The FDA has its own criteria for determining whether a petition delayed approval of a drug. In its last report, it said petitions delayed two approvals in fiscal year 2015, though it did not say which ones. The agency has also wrote it was concerned that resources to responding to the petitions by mandated deadlines came “at the expense of completing the other work of the Agency.”

The FDA has since taken a minor step to cut down on petitions, but the big leap came from the Federal Trade Commission. In February, the FTC charged Shire ViroPharma—the company behind the 24 citizen petitions over one antibiotic—with violating antitrust laws through “serial, sham petitioning.” (The company called the challenge “wholly without merit” in a statement.) “It was intended to send a message that the FTC is monitoring,” says Kurt Karst, an attorney with the food and drug law firm Hyman Phelps & McNamara.

The FTC’s crackdown on Shire seems to acknowledge that citizen petitions have evolved from being about safety to being about competition. And it is the FTC, not the FDA, whose mission is to enforce antitrust laws.