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Generic drug advocates say flat funding for the Office of Generic Drugs in the 2007 FY budget will do nothing to decrease the growing backlog of products waiting for approval. They claim other streamlining techniques will not reverse this trend.
Generic drug advocates are up in arms about the proposed fiscal year 2007 budget. The government plans no funding increases for FDA’s Office of Generic Drugs in a year when an estimated $20 billion worth of brand drugs are expected to go off patent.
Although the agency fully approved 361 generic drugs in 2005, an additonal 850 generic drug applications still await approval, according to FDA spokeswoman Karen Mahoney. Submissions increased 36 percent between 2004 and 2005.
The best way to shorten this queue would be to increase funding for the generic approval process, said Ed Thwaite, president of generic consulting firm E.W. Thwaite Associates. Modest funding increases for OGD could translate into billions of dollars saved on drugs down the line, he continued. An increase of $15 million would be enough to see substantial savings in the future, according to Generic Pharmacuetical Association spokeswoman, Andrea Hofelich.
In spite of this tremendous backlog at OGD, the generic approval process has become faster in recent years. The average approval time for generic drugs in 2005 was 16.5 months, Mahoney said via email. This is up from 16.3 months for 2004 but down from 17.3 months in 2003 and 18.3 months in 2002, according to agency budget documents.
Hofelich claimed this increased efficiency is due to collaborative efforts between the industry and OGD, such as electronic filing and online databases to guide the review process.
Next year, the agency aims to speed the approval process for 25 percent of generic drugs by two weeks. But Hofelich said the generic approval process could not get any faster without increased funding to hire more staff at OGD.
Although FDA hopes to increase efficiency, two generic drug initiatives are among the eight programs at the agency scheduled for funding cuts next year, according to FDA budget documents. Generic drug research contracts, and an initiative to improve information processing for generics will be among the programs cut as FDA reallocates approximately $7 million for higher-priority programs such as the Critical Path Initiative.
But even with the growing backlog of drugs awaiting approval, generics manufacturers are not interested in adopting user fees, Hofelich said. User fees for brand companies will increase in 2007, bringing more money to the agency.
External pitfalls such as legal challenges and citizen’s petitions can slow down the generic approval process beyond the control of the agency, according to Hofelich. As a result, even if a generic manufacturer paid the user fee, there is no guarantee it would speed the process enough to make the investment worthwhile.
In addition, most generic drug companies operate on very small margins. Price competition in the industry is so fierce that few manufacturers are willing to spend money on user fees, Hofelich explained.
But Thwaite added that as generic companies continue to consolidate and grow larger, user fees “might become a worthwhile opportunity.” He expects the issue to be raised again in the near future.