Product Hopping 2.0: Getting the FDA to Yank Your Original License Beats Stacking Patents

Posted by Social Science Research Network

Product Hopping 2.0: Getting the FDA to Yank Your Original License Beats Stacking Patents–  Lars Noah (University of Florida)

Abstract: Introduced in 1995, extended-release oxycodone (OxyContin) became a blockbuster drug for its manufacturer Purdue Pharma. Fifteen years later, the company secured FDA approval of an abuse-resistant formulation of this product (OxyContin OP). In 2013, just as its contested patents on OxyContin expired, Purdue managed to persuade the agency to withdraw its license for the original formulation, which prevented the introduction of generic copies of the older version that otherwise would have undercut sales of OxyContin OP. Pharmaceutical manufacturers routinely introduce new and improved versions of successful drugs as their patents on older products wind down and generic rivals prepare to enter the market. The recent experience with the reformulation of OxyContin represents an extreme variant of such arguably anticompetitive behavior. By virtue of the FDA’s withdrawal of the license for OxyContin, patients who derive no benefit from the abuse-resistant features will not enjoy the option of using cheaper generic versions of the older product, instead having to pay a premium for the new formulation over the next decade or so. The agency’s decision may well make sense in this context, but, to the extent that it signals a more general willingness to act favorably upon withdrawal requests by license holders whenever they introduce modified versions of their products, the FDA may have given brand-name drug manufacturers a powerful new mechanism for further delaying generic entry that entirely escapes antitrust scrutiny.