Opportunities and Obstacles for Generic Drugs

Generic drugs account for nearly 90% of prescription drugs in the United States due to policies that facilitate their development and regulatory approval. Despite this success, generic-drug makers face multiple legal and competitive hurdles to ensuring patient access to less costly, high-quality medicines. Tight profit margins on conventional generics discourage investment in modern manufacturing systems, resulting in contaminated and violative products that lead to recalls and shortages. Price hikes on established products, moreover, have generated a backlash and allegations of collusion and price gouging.

The result is a financial and operational squeeze on the generic-drug industry. Teva Pharmaceuticals is undergoing a major corporate overhaul to address financial difficulties, involving massive layoffs and the shuttering of manufacturing and R&D facilities. Novartis’ Sandoz division says that price pressures may lead to reductions in its US product portfolio and a greater focus on developing biosimilars and complex formulations. 
Fierce competition between brand and generic-drug makers adds to these difficulties. Most of the nine biosimilars approved by FDA remain off the market due to patent issues. Yet, FDA recently approved the first generic version of the leading multiple sclerosis therapy Copaxone, and more innovative follow-on drugs are under development (1). 

Brand “shenanigans”

A major complaint of generic-drug makers is that pharma companies block access to reference drug samples needed for bioequivalence testing and biosimilar development by abusing restricted distribution programs such as Risk Evaluation and Mitigation Strategies (REMS). The availability of generic medicines “is in jeopardy,” asserts the Association for Accessible Medicines (AAM), as brands block the purchase of active ingredients and samples; distributor and wholesaler consolidation further squeezes reimbursement; and high costs limit R&D and manufacturing (2). 

These topics were explored at an FDA public meeting in July 2017, where industry representatives and medical authorities discussed citizen petitions, labeling issues, late formulation changes, and use of REMS to stymie new generic testing. Similar issues were raised at a November 2017 Federal Trade Commission (FTC) workshop on “Understanding Competition in US Prescription Drug Markets.” In opening the meeting, FDA Commissioner Scott Gottlieb emphasized that more streamlined development and approval of generic drugs and biosimilars is key to ensuring consumer access to needed medicines. He warned pharma companies to “end the shenanigans” that delay the approval of generic competitors and extend a drug’s monopoly beyond intended timeframes (3). To address such hurdles to generic drug entry, FDA published draft guidance to facilitate implementation of single shared REMS programs.   

Congress is paying attention to these concerns as it seeks strategies for managing drug costs and outlays. At a July 2017 hearing before the House Judiciary Committee, Gottlieb outlined leading barriers to generic-drug development related to agency initiatives for bringing more generic drugs to market (4). In examining drug pricing issues at a hearing in December 2017, the House Energy & Commerce Health subcommittee discussed proposed legislation to enable generic and biosimilar access to needed brand supplies and other measures to support development of affordable drugs. 

More competition

In June 2017, Gottlieb implemented a Competition Action Plan for bringing complex generic therapies and combination products to market as key to moderating high drug costs (5). Next came an FDA “hit list” of off-patent, off-exclusivity brand drugs that lack approved generic competition and thus are eligible for expedited review and assistance in developing new versions of these products (6). FDA also published more product-specific guidance documents to help speed approval of complex products, synthetic peptides, and generic versions of opioids with abuse-deterrent features. The agency held several workshops in October 2017 on overcoming barriers to developing complex dosage forms where traditional bioequivalency and bioavailability tests may not support approval, including the use of new quantitative approaches and in-vitro tests to facilitate product development. Additional advisories aim to encourage development of difficult formulations such as ophthalmic suspensions, gels, inhaled drugs, injectables, and drug-device combinations. FDA is promoting early meetings with manufacturers to discuss innovative product research and review issues. A key topic is how design differences between a generic drug and brand drug may be addressed by demonstrating a limited impact on safety and approving labeling that explains such differences. 

Equally important are FDA efforts to streamline the overall process for evaluating and reviewing all new generics. A sign of success is the approval of more than 1000 new generics in 2017. Much credit goes to the generic drug user fee program (Generic Drug User Fee Amendments, GDUFA), which was established five years ago and recently reauthorized as GDUFA II. The fees have provided additional resources for the Office of Generic Drugs (OGD) in FDA’s Center for Drug Evaluation and Research (CDER) to reduce a huge backlog in unapproved abbreviated new drug applications (ANDAs) and to achieve a more predictable review process. 
OGD Director Kathleen Uhl reported at the AAM fall technical conference in November 2017 that the agency was meeting all GDUFA goals for timely review of ANDAs and supplements and for issuing new rules and guidance documents to clarify expectations for testing more complex products and injectables (7). Uhl noted, though, that a continued surge in new ANDAs made it hard to improve operations, and that too many applications with deficiencies lead to many refuse-to-file decisions and multiple review cycles. In January 2018, Commissioner Gottlieb announced additional guidance documents to reduce application deficiencies and changes in internal review practices to streamline the ANDA review process (8). 

FDA also is requiring that all applications include a complete list of relevant manufacturing operations to avoid delays in plant inspections involved in approving a new product. This is particularly important for priority ANDAs that may qualify for a faster eight-month review. But the request to see a full roster of facilities involved in product testing and production two months before ANDA submission has raised an outcry from manufacturers that the timeframe is inoperable and defeats the purpose of the priority review process. 

Seeking balance

The challenge to FDA and industry is to maintain a balance between encouraging the development of important new medical therapies and assuring access to low-cost follow-on medicines. While generic-drug makers complain about innovator firms using patent strategies and supply restrictions to delay competition, bio/pharma companies emphasize the need for incentives to test new therapies and develop added indications to an effective drug; and for labeling to ensure safe and appropriate use of a therapy. So far, there has been limited response to FDA’s list of drugs that lack generic competition, particularly where markets are small and product development is complex and costly. Some gains may come from efforts by regulatory authorities in different regions to harmonize the use of new methods for developing and approving new generics and to adopt common dossiers to facilitate product approvals in multiple markets.

At the same time, continued pressure on generic-drug prices may reduce product development and limit manufacturing in the US. Numerous state officials have filed lawsuits against generic-drug makers for alleged price-fixing, and debate continues over brand vs. generic product labeling to warn consumers about safety issues. All these trends will shape generic-drug production and costs in the coming months. 

References

1. FDA, “FDA Approves Admelog, the First Short-Acting ‘Follow-On’ Insulin Product to Treat Diabetes,” Press Release, Dec. 11, 2017.
2. AAM, “AAM Calls for FTC Action to Ensure US Supply of Generic Drugs for Patients,” Press Release, Dec. 8, 2017.
3. FDA, Remarks by Dr. Gottlieb at the FTC, Nov. 8, 2017.
4. FDA, Antitrust Concerns and The FDA Approval Process, July 27, 2017.
5. S. Gottlieb, “FDA Working to Lift Barriers to Generic Drug Competition,” FDA Voice blog, FDA.gov.
6. FDA, List of Off-Patent, Off-Exclusivity Drugs without an Approved Generic, FDA.gov.
7. K. Uhl, “State of OGD, Pivoting to GDUFA II,” AAM Fall Technical Conference, Nov. 6, 2017.
8. FDA, Statement From FDA Commissioner Scott Gottlieb, MD on New Steps to Facilitate Efficient Generic Drug Review to Enhance Competition, Promote Access And Lower Drug Prices, FDA.gov, Jan.3, 2018.

Article Details

Pharmaceutical Technology
Vol. 42, No. 2
February 2018
Pages: 14-15

Citation

When referring to this article, please cite it as J. Wechsler, "Opportunities and Obstacles for Generic Drugs," Pharmaceutical Technology 42 (2) 2018.