Pill stamped “Generic”

The New Jersey Star Ledger reports today, “FDA steps up generic drug program“.

The FDA said it will step up a program giving priority and expedited review for drugs that currently have no generic alternative, and hopes to add new generic drug reviewers to the 215 staff members now working on generic drug applications.

In addition, the FDA said it will focus on enhancing use of electronic programs for handling generic drug submissions and internal documents, and seek help and resources from other FDA departments when needed.

The backlog of generic drug applications has been growing:

The agency said it approved 682 generic drugs in fiscal 2007, 30 percent more than in the previous year. But the backlog is now more than 1,300 drugs, up from 780 at the end of 2005. The FDA said approval times average between 16 and 17 months, even though the law requires generic drug applications to be processed within six months.

Each of these delayed applications represents money that consumers and the health care system are forced to overpay every day — as long as there is no generic equivalent on the market, there is no competition and the brand-name manufacturer can charge whatever the market will bear.

The backlog at the FDA is just one of many factors that are depriving consumers of access to cheaper, safe and equally effective generic drugs. The brand-name drug industry seems to have devoted more of its creative energy to erecting ever greater barriers to generic drugs than to researching genuinely helpful new drugs. These barriers include:

  • Frivolous Citizen Petitions: Brand-name drug companies routinely file FDA “citizen petitions” raising alleged problems with generic drug approval applications. These petitions force the FDA to put the application on hold while they review the allegations. It is a very effective way for a brand-name company to delay the approval of a generic. Fortunately, the recently enacted FDA Amendments Act of 2007 attempts to address this, by prohibiting the FDA from delaying the approval of a generic drug when a citizen petition has been filed unless it is determined that “a delay is necessary to protect the public health.” It remains to be seen whether the FDA will routinely find that such petitions raise such public health concerns or not. No doubt brand-name drug companies will argue strenuously in every petition that the sky will fall if the generic is approved.
  • Patent infringement lawsuits: When a generic drug company seeks approval of a generic on the grounds that the brand-name company’s patent is invalid, the brand-name company gets an amazingly generous gift under current law: The right to sue the generic company for patent infringement before a single pill is ever produced. And there’s a bonus: They get an added 30 months on their patent monopoly. This provides an incentive to file a patent lawsuit that is near-irresistible, even if the lawsuit is frivolous, as such lawsuits too often are.
  • Authorized Generics: The first generic drug company that sticks its neck out and undergoes the time and expense of being the first to request FDA approval for a generic version gets 6 months to be the only generic version of a brand-name drug on the market. This “180 day exclusivity period” allows them to recoup the costs of defending against a patent infringement lawsuit, waiting (and wading) through the delayed FDA approval process, etc. But brand-name drug companies have exploited a loophole — when the first generic drug comes on the market, the brand-name company introduces a fake generic — what they call an “authorized generic” — which is the brand-name maker’s own pill, sold through another drug company. This deprives the generic drug company that went through the time and expense of being first from fully recouping their costs and enjoying the 6 months of exclusivity they are entitled to under the law.
  • Reverse payment settlements: These are settlements of the patent infringement lawsuits described above, in which the brand-name company pays off the generic company not to introduce a generic for some period of years. These collusive agreements have amazingly been found by various courts not to be illegal antitrust violations, on the notion that the law favors settlements of lawsuits, and that these settlements often result in the generic being available sooner than if the generic just waited for the patent to expire — an observation that ignores the fact that the generic would be available much sooner if it is in fact determined that the patent was invalid all along. PAL and 20 of our coalition organizations have gone on record supporting the Protecting Consumer Access to Generic Drugs Act of 2007, which would ban these collusive anti-consumer agreements.

This is just a partial list of the tactics that brand-name drug companies use to keep cheaper generics out of consumers’ hands and maintain high drug prices. The FDA’s moves to increase the staff who review generic drug applications will hopefully help ease the backlog and thus get more generic drugs on pharmacy shelves quicker. But as long as these other obstacles remain, we’re just tinkering at the edges of the problem.