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Policy makers debate strategies for promoting access to less costly medicines.
It’s well known that generic drugs account for 88% of prescription drug sales in the United States and have saved billions for patients and healthcare systems since Congress enacted the Hatch-Waxman Act more than 30 years ago. That growth, though, has created difficulties for FDA in processing the hundreds of resulting abbreviated new drug applications (ANDAs) and in inspecting an expanding number of generic-drug manufacturers and ingredient producers all over the world.
Concerns about ensuring the quality and safety of medical products, moreover, have led to the closure of outdated and noncompliant facilities, contributing to shortages and price spikes for certain widely used generics, particularly sterile injectables. These developments have raised questions about whether government regulatory policies limit competition in certain drug classes and support monopoly pricing.
Fees add resources
FDA’s ability to expeditiously approve new generics was compromised by a budget squeeze over many years. The Prescription Drug User Fee program (PDUFA) of 1992 bolstered funding for new drug review by the Center for Drug Evaluation and Research (CDER), but also shifted resources away from generics. ANDA approvals slowed to a crawl, resulting in an enormous backlog of pending applications.
Generic-drug makers finally agreed to pay user fees in 2012 to strengthen FDA regulation of generic-drug development, review, and inspection. In its first three years, the Generic Drug User Fee program (GDUFA I) has generated nearly $1 billion to support CDER’s Office of Generic Drugs (OGD) and certain operations of the new Office of Pharmaceutical Quality (OPQ). FDA’s field force also has increased inspections of overseas producers to help level the playing field between US and foreign manufacturers.
As FDA and industry negotiate GDUFA renewal in 2017, Congressional committees and the broader healthcare community are examining FDA policies and programs governing generics and the prescription drug market, as seen at a January 2016 hearing before the Senate Health, Education, Labor and Pensions (HELP) Committee. Chairman Lamar Alexander (R.Tenn.) cited concerns about “unnecessary regulatory burdens” that can slow drug development and the importance of a pharmaceutical marketplace that “remains competitive” (1).
The panel also is developing a Senate version of the “21st Century Cures” legislation, which the House approved in July 2015. Instead of combining multiple proposals into a comprehensive bill, Alexander and ranking Democrat Patty Murray (D-Wash) are considering numerous individual measures on FDA policies, disease research, and expanded use of electronic data technology to support broader research goals. With deliberations running through April 2016, though, there’s not much chance that Congress will adopt any final “Cures” legislation this year, but will wait until 2017 when action is required to reauthorize FDA user fee programs.
No more backlog
A main issue explored at the HELP hearing is whether too-slow FDA approval of new generics limits drug access and competition. Some legislators suggested that a pharma company would be less likely to buy up a small drug firm with the intent of boosting product prices if it knew that FDA could quickly approve a new competing drug.
Despite complaints from generics makers about still-delayed ANDA approvals, CDER director Janet Woodcock made a strong case for agency progress in addressing the backlog problem, speeding important new generics through the approval process and expanding timely inspections of manufacturing facilities. She explained that generic-drug makers submitted nearly 2500 applications in 2013 and 2014, making it difficult for OGD to process those documents and to tackle long-pending submissions, while also restructuring and expanding its program (2).
Even so, in the past three years CDER was able to “take action” on approximately 85% of 4600 overdue ANDAs and post-approval supplements, Woodcock stated. She promised that all the backlog would be gone by 2017 and that OGD would meet its goal for taking a “first action” within 10 months on ANDAs submitted this year. No applications in the backlog are first generics, she emphasized, and OGD’s “express lane” policy moves these products to the front of the queue. She also highlighted CDER efforts to promote advanced manufacturing in the generic-drug industry, as continuous, computer-controlled production systems would enable fast ramp-up of new production.
Key to achieving these goals is an FDA-industry effort to achieve more first-cycle approvals. A “right-the-first-time” policy permits rejection of notably incomplete applications when they first come in. CDER also is issuing more guidance on what data it wants from sponsors and encouraging manufacturers to conduct all necessary tests and processes before sending in applications. A new pre-ANDA process that addresses approval challenges for particular drugs prior to application submission may be included in GDUFA II.
In highlighting FDA efforts to quickly approve first generics, Woodcock acknowledged that multiple drugs per innovator may drive down costs and facilitate patient access to more affordable therapies. Yet FDA does not approve a new drug or generic in response to rising prices, she noted, and does not have the expertise to calculate what qualifies as a “price hike:” would that involve doubling a price from 10 cents to 20 cents, or possibly raising a list price by more than 1000%?, she queried, adding that a new report from the US Department of Health and Human Services (HHS) better addresses generic-drug pricing (3).
The agency does keep a close eye on sole-source products and those with only one or two competitors, as part of efforts to anticipate drug shortages and supply disruptions. Woodcock
indicating that 99 innovator drugs have only one generic competitor; 66 drugs have two generics; and 623 drugs have 3 or more generics. Of particular interest is the segment of 125 innovator drugs with no approved generics (and no patent or exclusivity protections) (4).
These drugs may have limited competition, Woodcock explained, because they are orphans or specialized therapies that serve small patient populations. Many topical products, inhalants, and complex substances also lack well-understood methods for testing and documenting bioequivalence. To support the development of generic versions of such therapies, GDUFA provided FDA with approximately $35 million for research on new bioequivalence test methods and guidances to “open up previously blocked pathways” for new generics.
Woodcock acknowledged that, in some cases, innovator firms take steps to block and delay generic drug entry. Generic-drug makers have complained loudly about problems in obtaining supplies for bioequivalence testing of brand products that are subject to Risk Evaluation and Mitigation Strategies (REMS). Woodcock said that FDA has advised brand firms that REMS don’t warrant withholding drugs for research purposes, and indicated that Congressional action would help address this problem more directly. The Generic Pharmaceutical Association also wants the legislators to repeal a recent budget provision that boosts Medicaid rebates on generic drugs (5).
One strategy Woodcock strongly opposed is to turn to drug compounders to provide less costly alternative medicines when generics fail to meet demand. She emphasized that there are “very great risks” in such proposals, citing two examples of compounded drugs that sickened dozens of people. Mass production of these drugs without adherence to GMPs, she warned, “could have put thousands of people in the hospital.”
1. US Senate Committee on Health, Education, Labor & Pensions, “Alexander: Despite Extra $1 Billion to Speed Generic Drug Approvals, FDA Process Still Too Slow,” Press Release, Jan. 28, 2016, www.help.senate.gov/chair/newsroom/press/alexander-despite-extra-1-billion-to-speed-generic-drug-approvals-fda-process-still-too-slow, accessed Feb. 2, 2016.
2. Implementation of the Generic Drug User Fee Amendments of 2012 (GDUFA), Testimony of Janet Woodcock, MD, Before the Committee on Health, Education, Labor and Pensions, Jan. 28, 2016, www.help.senate.gov/imo/media/doc/Woodcock5.pdf, accessed Feb. 2, 2016.
3. Office of the Assistant Secretary for Planning and Evaluation, Understanding Recent Trends in Generic Drugs, Jan. 27, 2016, https://aspe.hhs.gov/pdf-report/understanding-recent-trends-generic-drug-prices, accessed Feb. 2, 2016.
4. FDA, Slides from FDA GDUFA presentation before the Senate Health, Education, Labor and Pensions Committee, January 2016,
5. GPhA, “GPhA to Congress: Embrace Five Opportunities for More Generic Drug Savings,” Statement by Chip Davis, President and CEO, GPhA, Feb. 1, 2016, www.gphaonline.org/gpha-media/press/gpha-to-congress-embrace-five-opportunities-for-more-generic-drug-savings, accessed Feb. 2, 2016.
Article DetailsPharmaceutical Technology
Vol. 40, No. 3
When referring to this article, please cite as J. Wechsler, "Generic-Drug Production and Oversight Challenge FDA and Manufacturers," Pharmaceutical Technology 40 (3) 2016.