As generics savings increase, FDA looks to spark competition

Generic medications made up 89% of dispensed U.S. prescriptions in 2016, but only 26% of total drug costs. The use of generics brought savings of $253 billion in 2016, bringing the 10-year savings from generics to $1.67 trillion, according to the ninth annual “Generic Access and Savings in the U.S.” report compiled by the QuintilesIMS Institute for the Association for Accessible Medicines (formerly the Generic Pharmaceutical Association).

The savings report, published in June, highlighted the importance competition in the generics market plays in driving down costs — something the Food and Drug Administration has taken an interest in this year with its Drug Competition Action Plan, informed largely by the savings that generics bring.

AAM’s report highlighted that Medicare saved roughly $1,883 per enrollee ($77 billion) and Medicaid saved $512 per enrollee ($37.9 billion) as a result of using generics. The therapeutic categories that saw the most savings were mental health, with $44 billion in savings; hypertension, which saw $29 billion in savings; and cholesterol, which saw $28 billion in savings.

The savings that generics and biosimilars bring, AAM reported, act as a driver for access to treatment for patients.

“Access is a value we uphold at every opportunity,” AAM president and CEO Chip Davis said when the report was released. “All of our work, from promoting marketplace competition to advocating strategic enhancement of the Food and Drug Administration’s generic drug and biosimilar approval process, comes down to the promise of putting treatments within the reach of patients.”

The report also includes data from researchers who looked into abandonment behaviors of patients with regard to both branded and generic products, finding that new patients abandon branded drugs at a rate 266% higher than they do generic drugs. The report noted that co-pays play a key role in abandonment, with 14% of patients who abandon a branded medication switching to a generic within 30 days of initial approval.

The FDA’s new commissioner, Dr. Scott Gottlieb, has not required much convincing as to the value of increased generics usage. In July, Gottlieb unveiled his plan to increase competition among generics manufacturers in an effort to drive costs down.

Gottlieb’s first move was to have the FDA release a list of branded drugs that have no listed patents or exclusivities with no currently approved generics. The agency also instituted a new policy to speed up review of applications for generic versions of products with limited competition. Additionally, the FDA has promised to expedite review of any generic application for a product on the list to speed up its time to market. And more broadly, the agency said that it would begin expediting the review of applications until there are three generics for a given product.

“No patient should be priced out of the medicines they need, and as an agency dedicated to promoting public health, we must do our part to help patients get access to the treatments they require,” Gottlieb said. “Getting safe and effective generic products to market in an efficient way, being risk-based in our own work and making sure our rules aren’t used to create obstacles to new competition can all help make sure that patients have access to more lower-cost options.”

Preventing drug makers from using FDA tools to limit competition is another crucial element of the Drug Competition Action Plan. One difficulty that generics companies run into is getting access to branded products for comparative testing, which the FDA said some manufacturers attempt to limit.

Gottlieb has pointed specifically to the difficulty some companies have in accessing medications under limited distribution — either voluntarily or through a Risk Evaluation and Mitigation Strategy. Additional, potentially limiting efforts include using the legal requirement to have a single, shared REMS across branded and generic versions of a drug as a way to block generic entry, as well as prolonging negotiations with generics makers over the single, shared system, Gottlieb said.

In addition to efforts to identify places to rein in drug makers, the FDA also is focusing on clearing out its backlog of applications for approval. At a July 18 public meeting, at which the FDA called for public comment, Gottlieb said that it marked the beginning of a new internal strategy for dealing with abbreviated new drug applications, as well as the starting point for a guidance on the best submission practices for drug makers.

Before the end of 2017, the FDA said it would issue a Manual of Policies and Procedures pertaining to internal policies that will streamline the review process, and that it would share a “Good ANDA Submission Practices Guidance” guidebook for manufacturers.

“Neither our internal MAPP nor the guidance alone can ensure that ANDAs will be approved more efficiently,” he said. “But taken together, I believe they will help effectuate real and measurable change.”