FDA demonizes pharma over generics, but most company reputations can take the blow

The FDA is taking pharma to the woodshed again, this time over generic drug stalling tactics. Recently, the agency published an online list of pharma companies that together have racked up 150 complaints from generics makers seeking samples.

But while that probably feels like familiar public shaming territory for pharma, it’s not likely to end up causing broader damage to the reputations of the companies and brands named, one expert says.

The publishing of the list on Thursday did initially result in a slew of media coverage dropping phrases such as "shame and name" or "gaming the generic drug system," along with some minor social media buzz.

Some companies on the list have also seen stock price dips. The stock price of Celgene, for instance, topped the list with 31 generic inquiries for help from the FDA. Its stock declined for five straight days.

Others on the list with fewer inquiries include Actelion, which is owned by Johnson & Johnson, Gilead and Novartis, but it’s difficult to draw a line between the generics news and their stock-price drops. J&J’s shares are down, but it ended Alzheimer's drug development last week. Novartis is also down, but it’s still dealing with fallout from its ill-fated consulting deal with Trump ex-lawyer Micheal Cohen.

Long-term damage to the now "Scarlet Letter" pharma companies is certainly possible, but Mark Senak, Eye on FDA blogger and public relations professional, pointed out that several mitigating factors may dampen the impact.

Generics competition is just one of many issues that could ding pharma’s reputation, and it’s far from the biggest one. Senak also thinks the list is just part of the story around generics and maybe "provides the beginning basis for conversation, but not the conclusion."

Besides, the FDA already publishes a lot of information about pharma companies—like warning and untitled letters for misdeeds in marketing and manufacturing—that haven’t usually resulted in long-term reputation damage. However, he said, "In the end, it may be a matter of scale—how often a company appears on the list and with how many letters over the course of how many products whereby the character of a company may become a focus rather than being named once."

Still, that doesn’t mean pharma companies should sit back and relax. Senak said they should develop an approach and be prepared to discuss it if asked about their track record working with generic drugmakers.

"Developing a statement of principles to publish with regard to one's corporate approach to generic development might not be a bad idea," he said. "In the reactive sense, they should be able to enunciate a rationale for their action or explanation of the circumstances whereby a letter of complaint may have been sent. A letter alleging complaint by itself is not a conclusion, it is an entree to a discussion so that a conclusion can be reached."

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