In October, the FDA and manufacturers of finished generic drugs and ingredients (Active Pharmaceutical Ingredients or APIs) reached a ground breaking agreement that can (1) ensure the safety of generic drugs and APIs wherever they are produced globally and (2) ensure that new generic drugs become available to patients more quickly.

The drumbeat of manufacturing safety problems occurring in domestic and foreign plants that produce both brand name and generic pharmaceuticals continues must be addressed. In the last week, FDA has cited generic drug maker Mylan and German manufacturer Jenahexal for manufacturing problems, while Ranbaxy settled longstanding concerns in time to launch their generic version of the block-buster drug Lipitor.

Manufacturing failures can create obstacles to the ongoing availability of affordable generic drugs, or even serious risks to patient safety. Thus this new agreement (the Generic Drug User Fee Act or GDUFA) is critical. Addressing the lag in foreign inspections is especially significant, since 80 percent of active ingredients and bulk chemicals used in U.S. medicines now come from foreign countries. Currently, the FDA does not have the authority or resources to inspect all foreign suppliers of drug ingredients. Domestic plants are inspected by FDA on average every 2.7 years. The New York Times recently reported that at its current pace, the FDA would need 13 years to inspect every foreign drug plant exporting to the United States. 

The draft GDUFA agreement is a major commitment by the industry to solve this problem by “ensuring that industry participants, foreign or domestic, who participate in the U.S. generic drug system are held to consistent high quality standards and are inspected biannually, using a risk-based approach, with foreign and domestic parity.” The industry has backed up this commitment by agreeing to provide $300M annually in user fees to provide FDA with the resources to increase inspections and to speed the review of new generic drugs. The fees would supplement FDA annual funding.    Guaranteeing the availability and safe manufacturing of generics is not only critical to patient safety, but also to access to care and to the financial stability of families, health plans and public programs. Today 78 percent of all prescriptions dispensed in the U.S. are generics. In 2008, the average cost of a generic drug was nearly four times less than the brand name equivalent ($35.22 vs. $137.90). Thus, while 78 percent of prescriptions are generics, the total spending on generics accounts for just 25 percent of the total U.S. drug spending, and generics drugs have saved more than $824B over the last decade.

GDUFA can play a role in solving the problem of drug shortages, as well. Shortages can be catastrophic for patient safety, and often affect generics since they account for 78 percent of prescribed drugs. Stepped up inspections at foreign plants can prevent manufacturing problems that can lead to shortages of medically necessary drugs. Health system pharmacists, who confront these problems every day, point out that “user fees can result in faster approval processes for generic drugs” while not sacrificing  patient safety concerns. 

The FDA-industry draft agreement is now being reviewed by the Office of Management and Budget. When approved, it will be sent to Congress for action, probably to be included in the renewal of the Prescription Drug User Fee Act (PDUFA), which deals with user fees for brand-name drug approvals.

 Marcia Hams, Director of Prescription Access & Quality