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Speeding up Generic Drug Approvals to Lower Prices

The FDA is fast-tracking the application process for generics to help bring down the cost of prescription drugs. But experts say it's not enough.

drugs

Americans spend a lot on medications.

And they’re getting more expensive.

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In the United States, prescription drug spending is expected to increase by 4 to 7 percent through 2021.

If you already spend thousands of dollars a month to treat a chronic illness, that’s no small matter.

Part of the problem is the lack of generic drugs.

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Under a new policy, the Food and Drug Administration (FDA) will expedite review of generic drug applications for certain branded drugs.

Included are drugs that don’t have at least three generics available. In addition, the medications don’t have patents, exclusivities, or approved generic drug applications.

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This list of branded drugs will be updated every six months.

“This is a very good incentive for generic developers who are currently waiting almost three years, on average, for a generic drug approval,” said Wayne Bowden, director of client solutions at Biorasi, a Florida-based outsourcing partner for pharmaceutical clinical trials.

“The agency is offering a faster time to market for the first few generics to enter the market for a particular drug, with the hopes this will bring drug costs into check more quickly, and end the seeming monopoly that many innovators have on their branded products,” Bowden told Healthline.

Bowden explained that the biggest cost reductions take place with the first few generics introduced. After that, the price tends to stabilize.

Read more: First wave of biosimilar drugs may save billions »

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Patients stand to benefit

Dr. Jeffrey N. Hausfeld is chairman and chief medical officer of BioFactura, a biopharmaceutical development company in Maryland.

He told Healthline that having multiple generic drugs on the market drives down cost.

“For the most part, we’ve done a good job monitoring the potency, purity, and safety of generics for patients in the United States and globally,” Hausfeld said.

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The goal, he said, is to blend science and risk-based approaches to applications for generic and biosimilar drugs with the need to bend the cost curve in healthcare.

“That may mean taking certain applications out of sequence so they get a priority review,” he explained.

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Hausfeld said there are hundreds of thousands of patients who rely on drugs to treat chronic conditions such as multiple sclerosis, Crohn’s disease, and arthritis.

“The problem is that many times they can’t afford it. It’s a choice between putting gas in the car and taking the drug. We’ve heard this from patients and associations trying to help patients get access to these very expensive drugs,” said Hausfeld.

“What we have to do as a nation, as a society, and as an industry is to make sure they can afford to utilize this technology.”

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Read more: More older Americans taking dangerous drug combinations »

Why the lack of generics?

Patents, exclusivities, and the application process all factor in.

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But there are other reasons some drugs lack generics.

Bowden noted that many of the drugs on the FDA’s list are old. They’ve been replaced by drugs that are more effective.

“If the doctors aren’t prescribing the medication as a standard of care to their patients, there isn’t a market for the generic to enter,” he explained. “In other cases, the drugs are available as a whole, or in part, in an [over-the-counter] setting sold as nutritional products, rather than prescribed by a physician.”

Bowden said that even with an expedited approval pathway, one wouldn’t expect developers to jump at the opportunity to enter that market.

Then there are the lawsuits.

“Generic developers — especially first-to-file ones — almost always have to contend with a lawsuit filed by the innovator as soon as they receive approval,” said Bowden. “It puts another roadblock on the path to market. One wouldn’t expect this to change with the new agency provisions.”

Read more: Millennial doctors, patients shaping healthcare »

Room for improvement

Sean Karbowicz, RPh, PharmD, founder and general manager of MedSavvy, said these policies might help.

He also believes more must be done to ensure vigorous competition.

“There has been a long-standing pattern of drug manufacturers raising prices when additional brand name products enter the market. We’ve seen this with multiple sclerosis treatments, insulins, and biologics for inflammatory diseases, to name a few,” he said.

“Enbrel, for example, cost about $10,000 in 1998, but costs over $40,000 today, as similar products have entered the market to compete against it. One might suspect manufacturing efficiencies ought to have been developed. This type of pricing behavior does not indicate a healthy, competitive marketplace,” continued Karbowicz.

He also noted that the new policy doesn’t seem to accelerate the entry of biologics into the market.

“Biologics comprise many of the high-cost specialty medications on the market. While we are excited to start to see the entry of biosimilar medications, the pace is slow. And we may still see some of the profit-protecting pricing practices we’ve seen with branded products unless there is an adequate number of manufacturers in the game to truly drive the prices down,” explained Karbowicz.

Hausfeld agrees that when it comes to biosimilars, further incentives by the FDA would attract bigger players.

“We need lower cost alternatives and if that’s where this initiative takes us that’s a very good thing,” he said.

There’s also an issue with “orphan” drugs.

According to Hausfeld, there’s room in the market for many competitors for commonly used drugs. But some drugs on the list don’t have multiple generics simply because they’re only used by a small number of people.

“You can’t force manufacturers to make drugs knowing the margins are really small,” he explained.

“The FDA policy in general speaks to a culture of understanding the marketplace and all stakeholders’ needs. That’s good. If we have an FDA that is friendly to manufacturers trying to do a good, honest job, and acts as a partner to get drugs approved, as opposed to throwing up artificial obstacles, it would be positive for the industry and our patients,” said Hausfeld. 

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