Ever since Allergan (AGN) struck an unusual deal last month to sell patents for the Restasis eye treatment to a Native American tribe, the drug maker has been accused of using a clever legal tactic to forestall low-cost generic competition to a big-selling product.
Now, one organization is attempting to quantify the potential cost to the U.S. health care system, and the number is a whopper — Americans would pay an extra $10.7 billion if a generic version of Restasis is unavailable between 2018 and 2024, when the existing patents on the medicine are due to expire.
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What’s not discussed in this article, and I think should be included in any discussion of impact on the US health care system, is efficacy. The FDA approved Restasis on the basis of improvements in a test that measures tear production, not improvement in dry eye symptoms. An American Academy of Ophthalmology dry eye guideline questioned whether benefits with Restasis are clinically significant. It also has a slow onset, taking up to 3 months for patients to notice improvement. Prescrire International, a French non-profit journal dedicated to rational prescribing, in a review of another formulation, noted that, in addition to being ineffective, there’s a burden of adverse effects to contend with (e.g., burning, stinging, increased infection risk). This formulation was graded by French authorities as having ‘no improvement in actual medical benefit’ leading to a reimbursement rate of 15%. So why does Restatis continue to be used so much? I think the simple answer is that ophthalmologists don’t have many options for patients who don’t improve with artificial tears. Of note, another eye drop called Xiidra (lifitegrast) was approved by the FDA in 2016. Cost is similar to Restasis. In Xiidris clinical trials, Patients had average improvements of 5 to 12 points on the Dry Eye Scale (100-point scale) — modest improvement. There is some evidence that it might have a faster onset, but that’s a speculative observation since it hasn’t been compared head-to-head with Restatis that I’m aware of. The point of all this rambling is that the billions spent on Restasis in the US doesn’t look like money well-spent.
The evaluation omitted the fact that the 2016 FDA guidance on testing for Restasis generics is tougher than the 2013 guidance. Realistically, given the new guidelines it is doubtful this product will have more than one AB rated generic within the few years. In that case the single source generic will price itself close to Restasis and the product will be a gold mine for both companies.