Examining the Impact of Voluntary Restricted Distribution Systems in the Pharmaceutical Supply Chain

PURPOSE:

• To discuss the purpose of using voluntary restricted distribution systems in the pharmaceutical supply chain.
• To examine how a manufacturer may use a restricted distribution system to delay or block generic competition.

BACKGROUND:

• To expedite the introduction of generic medications, the Abbreviated New Drug Application allows the FDA to rely upon its previous finding of safety and effectiveness for the approved medicine if a generic manufacturer shows that its medicine is bioequivalent.
• In order to conduct studies and show bioequivalence, a generic manufacturer must obtain samples of the approved medicine. In some instances, there are legitimate distribution restrictions on medications with safety concerns – the Risk Evaluation and Mitigation Strategies (REMS) program provides the FDA authority to require such restrictions as it deems necessary.
• Some manufacturers also self-impose distribution restrictions; at least one manufacturer misused a restricted distribution system.
• A 2014 study found that misuse of restriction distribution systems potentially costs the health care system an estimated $5.4 billion annually.