BRAND NAME DRUG COMPANIES EFFORTS TO EXTEND THEIR PHARMACEUTICAL MONOPOLIES: STATE SUBSTITUTION LAWS AND NARROW THERAPEUTIC INDEX DRUGS

Under the Drug Price Competition and Patent Term Restoration Act of 1984 (Hatch-Waxman Act), FDA cannot approve a generic drug unless the agency determines that the generic drug product is bioequivalent and therapeutically equivalent to the brand name product.

State formulary boards develop lists of generic products that pharmacists may substitute for brand name products when filling prescriptions. While most state boards accept FDA s therapeutic equivalence determinations, some state boards are willing to reexamine the issue by requiring the submission of data already reviewed and found acceptable by FDA. In these states, brand name drug firms have attempted, and are attempting, to block the substitution of generic products at the state formulary boards by challenging FDA s therapeutic equivalency decisions on generic drugs, on a drug-by-drug basis. Most commonly, such challenges are brought for products the companies characterize as narrow therapeutic index (NTI) drugs. FDA dismissed brand name drug manufacturers challenges to FDA determinations of therapeutic equivalence in a January 28, 1998 letter to health care providers. FDA stated that there is no scientific basis for a separate determination of therapeutic equivalence by state pharmacy boards once FDA approves a generic drug product.

This abusive practice by brand name drug companies does not serve any public health purpose. It just further delays the marketing of generic drugs and artificially maintains the high costs of prescription drug products.

NAPM supports legislation that would preempt state formulary boards from reconsidering FDA s determination that a generic drug is therapeutically equivalent to the brand name product.