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Jill Wechsler is Pharm Exec's Washington Corespondent
They already dominate the pharmaceutical market, and now generics are poised to move into biologics and complex dosage forms.
Since enactment of the Hatch-Waxman Act 25 years ago, the generic drug industry has grown exponentially, a cause for celebration among generics firms and their customers. Generics now account for 70 percent of prescriptions in the US, with health plans, payers and pharmacy benefit managers (PBMs) promoting these less expensive, bioequivalent products as a way to curb healthcare spending and expand patient access to drugs. Sales of generics are currently near $50 billion, and industry analysts anticipate another growth spurt as brand-name products with about $60 billion in sales lose patent protection over the next two years.
One aim of the 1984 legislation was to maintain a balance between stimulating generic product development and maintaining incentives for innovation. That goal has been tested over the years by both sides "gaming the system." Generics makers have aggressively challenged drug patents before scheduled expiration, while brand-name firms have delayed generic entry through 30-month stays, citizen petitions, and deals to "authorize" their own generic products.
With 25 years of product development and manufacturing experience, generics makers are looking for future growth in follow-on versions of more complex dosage forms and "biosimilars" of large molecules. Health reform legislation is slated to establish a pathway for the Food and Drug Administration to approve follow-on biologics (FOBs), something that wasn't included in Hatch-Waxman. There's general agreement on Capitol Hill over how much clinical research FDA should require to document similarity between an innovator and FOB, and on difficulties for establishing interchangeability. But patent exclusivity remains contentious.
"A 12-year market exclusivity policy will result in few, if any, generic biologics and less, rather than more, innovation," said Teva North America president Bill Marth at the September meeting of the Generic Pharmaceutical Association (GPhA). Teva will be involved in this market, he said, but only as an innovator firm, not to make biosimilars if exclusivity is so extensive.
There's also a conflict over the framework for resolving patent disputes. Proposals differ for requiring disclosure of patent information, for challenging patent terms, and for communicating pending challenges to involved parties. Generics makers won a requirement in Senate legislation for the same Medicare billing codes for brand and follow-on products—an approach that encourages biosimilar utilization. But that's a minor item in the larger, high-stakes debate.
Generics makers would like Congress to support their fight against several policies designed to curb or delay product utilization. One threat comes from state "carve-out" laws that limit generic substitution at the pharmacy. Such policies arise from anxiety, often generated by brand competitors, that a generic raises safety issues for patients. Congress' Government Accountability Office may investigate.
Another fight involves marketing of authorized generic products by pharma companies just before patent expiration, which usually results in limited generic competition during the 180-day exclusivity period. The looming wave of major patent expirations is prompting development of more "branded generics," produced either by the original manufacturer or under contract with a generics firm. Brands are expanding their capacity in this area through the purchase of generics firms around the world.
Interestingly, both brands and generics want flexibility to settle patent disputes through agreements that involve pharma payments to generics firms to delay market entry until an agreed-on future date. While the Federal Trade Commission (FTC) and other critics have labeled these "pay-for-delay" deals as anti-competitive, manufacturers on both sides claim that such arrangements can avoid lengthy patent battles and end up accelerating consumer access to generic products. The FTC has gone to court to block delay settlements, and Congressional leaders may try to curb these deals.
Generic-brand market competition also affects FDA regulatory programs. Agency officials maintain that its test procedures and standards ensure that an approved generic drug will yield the same clinical results and safety features of the reference product. Such assurance, however, requires clear documentation that generic drugs meet manufacturing standards and comply with regulatory requirements.
Here, generics makers could do more, according to FDA officials. At GPhA's October technical conference, Helen Winkle, director of the Office of Pharmaceutical Science in FDA's Center for Drug Evaluation and Research (CDER), urged manufacturers to be more vigilant in monitoring manufacturing processes and supply chains. A number of product recalls and FDA warnings have tarnished the industry and aggravated public concerns. Last year FDA banned the import of Ranbaxy products from two plants in India. In recent months, FDA hit KV Pharmaceuticals and Caraco Pharmaceutical Laboratories with consent decrees, launched an extensive recall of products from Actavis' New Jersey plant, and banned imports from Canada's Apotex.
This growing skepticism about the equivalence and safety of generic drugs troubles Gary Buehler, director of CDER's Office of Generic Drugs (OGD). He's alarmed about a wave of anti-generics claims in consumer publications and television programs featuring charges about extreme adverse reactions to generic therapies. The fuel for this fire may be FDA approval of generic versions of newer epilepsy treatments, which have generated complaints from neurologists about poor patient response and adverse events.
As the demand grows for more affordable generic drugs, Buehler noted, it's important for the public to have confidence in these treatments. "Many Americans are waiting for our products," he said, "but we want them to be the products they are waiting for."
At the September GPhA meeting, FDA deputy commissioner Joshua Sharfstein called on generics industry leaders to assume more responsibility for informing doctors and patients about how to use drugs safely, and urged greater industry collaboration on such important public health issues as those described in FDA's Safe Use initiative.
Sharfstein also responded to manufacturer complaints that it still takes almost two years to gain approval of a generic drug application, and that backlogs in pending applications are growing. He said that reducing the generic application backlog is a top priority for FDA leadership, but that a user fee program was needed to achieve this goal. At that meeting, both Sen. Orrin Hatch (R-UT) and Rep. Henry Waxman (D-CA) agreed on the need for increased funding for OGD and for generic drug user fees. This would expedite the review process for generics, said Hatch, and speed consumer access to medicines. Waxman noted that a user fee program should come with "real accountability" on review processes and regulatory transparency.
OGD currently receives more than 800 abbreviated new drug applications each year (up from about 350 in 2002) and approves about 600; the result is more than 1,600 pending applications. Congress earmarked an extra $10 million for OGD in its 2010 budget, but the office needs more to make a real dent in the backlog, Buehler acknowledged.
Earlier this year, the Obama administration proposed a $36 million fee program for generics, (more than double previous levels), but industry opposed the plan and Congress dropped it. Now industry leaders say they're willing to reopen fee negotiations in what they see as a more congenial environment at FDA. Manufacturers are encouraged by the agency's progress in responding to citizen petitions within a new six-month time frame and in dealing more efficiently with 30-month stays. Such gains could lead to performance metrics that could form the basis of a fee program, such as consults on complex drug development, and timely plant inspections and specific application approval limits. "But we want some value for what we're paying," said Teva's Marth.
One way to address generic drug quality and safety concerns, says OPS director Helen Winkle, is for "the generics industry to step up to the plate" and support efforts to "strengthen the science underpinning FDA regulatory decisions." FDA researchers are examining the effects of excipients on bioavailability and new sequential designs for bioequivalent studies on highly variable drugs, but many other topics require collaboration and support from manufacturers. Outside research organizations also are examining generic drug safety and efficacy. The National Institute on Neurological Disorders and Stroke at the National Institutes of Health, for example, is studying pharmacokinetic results of patients who have reported problems with generic epilepsy treatments to assess whether generic anticonvulsants do pose safety problems for some patients.
And payers and PBMs want information to support prescribing decisions when new generics come to market. In anticipation of generic versions of the anti-clotting drug Plavix (clopidogrel), Medco has launched a large study comparing deaths and heart problems of patients prescribed the blockbuster Plavix to those using the newer brand Effient (prasugrel). The study will identify patients who are able to metabolize Plavix normally through pharmacogenetic assessments with an eye to determining that certain patient populations could fare well on low-cost generic clopidogrel when it appears in two years, while a smaller group that does poorly on clopidogrel should be allowed to stay with the more expensive brand prasugrel.
Jill Wechsler is Pharmaceutical Executive's Washington correspondent. She can be reached at email@example.com