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The American Journal of Managed Care April 2018
Delivering on the Value Proposition of Precision Medicine: The View From Healthcare Payers
Jane Null Kogan, PhD; Philip Empey, PharmD, PhD; Justin Kanter, MA; Donna J. Keyser, PhD, MBA; and William H. Shrank, MD, MSHS
Care Coordination for Children With Special Needs in Medicaid: Lessons From Medicare
Kate A. Stewart, PhD, MS; Katharine W.V. Bradley, PhD, MBA; Joseph S. Zickafoose, MD, MS; Rachel Hildrich, BS; Henry T. Ireys, PhD; and Randall S. Brown, PhD
Cost Sharing and Branded Antidepressant Initiation Among Patients Treated With Generics
Jason D. Buxbaum, MHSA; Michael E. Chernew, PhD; Machaon Bonafede, PhD; Anna Vlahiotis, MA; Deborah Walter, MPA; Lisa Mucha, PhD; and A. Mark Fendrick, MD
The Well-Being of Long-Term Cancer Survivors
Jeffrey Sullivan, MS; Julia Thornton Snider, PhD; Emma van Eijndhoven, MS, MA; Tony Okoro, PharmD, MPH; Katharine Batt, MD, MSc; and Thomas DeLeire, PhD
A Payer–Provider Partnership for Integrated Care of Patients Receiving Dialysis
Justin Kindy, FSA, MAAA; David Roer, MD; Robert Wanovich, PharmD; and Stephen McMurray, MD
Financial Burden of Healthcare Utilization in Consumer-Directed Health Plans
Xinke Zhang, PhD; Erin Trish, PhD; and Neeraj Sood, PhD
Progress of Diabetes Severity Associated With Severe Hypoglycemia in Taiwan
Edy Kornelius, MD; Yi-Sun Yang, MD; Shih-Chang Lo, MD; Chiung-Huei Peng, DDS, PhD; Yung-Rung Lai, PharmD; Jeng-Yuan Chiou, PhD; and Chien-Ning Huang, MD, PhD
Physician and Patient Tools to Improve Chronic Kidney Disease Care
Thomas D. Sequist, MD, MPH; Alison M. Holliday, MPH; E. John Orav, PhD; David W. Bates, MD, MSc; and Bradley M. Denker, MD
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Limited Distribution Networks Stifle Competition in the Generic and Biosimilar Drug Industries
Laura Karas, MD, MPH; Kenneth M. Shermock, PharmD, PhD; Celia Proctor, PharmD, MBA; Mariana Socal, MD, PhD; and Gerard F. Anderson, PhD

Limited Distribution Networks Stifle Competition in the Generic and Biosimilar Drug Industries

Laura Karas, MD, MPH; Kenneth M. Shermock, PharmD, PhD; Celia Proctor, PharmD, MBA; Mariana Socal, MD, PhD; and Gerard F. Anderson, PhD
A limited distribution network is a pharmaceutical distribution strategy that some drug companies have capitalized upon to obstruct generic and biosimilar competition.
ABSTRACT

A limited distribution network (LDN) restricts the distribution channel for a pharmaceutical drug to 1 or a very small number of distributors. This strategy may allow for more effective allocation of drugs in shortage and is purported to help ensure the safe distribution of high-risk drugs to small patient populations. However, in recent years, some drug companies, including Turing Pharmaceuticals, have used LDNs to prevent generic and biosimilar companies from accessing samples of drug products necessary to perform testing required by the FDA for generic and biosimilar drug applications. LDNs also hamper provider access to pharmaceuticals and facilitate price gouging. This paper synthesizes existing knowledge on the misuse of LDNs to thwart competition, clarifies the relationship between limited distribution and the FDA Risk Evaluation and Mitigation Strategies, discusses proposed federal legislation under consideration to address this issue, and offers several policy options to remedy this anticompetitive practice, including authorizing the FDA to require the sale of approved drug products to generic and biosimilar drug developers.

Am J Manag Care. 2018;24(4):e122-e127

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