FDA Pushes Generics In A Not-So-Indirect Effort to Control Drug Prices

Generics drugs are several folds cheaper than innovator drugs, so a realistic way to lower drug prices is to encourage more generic versions of FDA-approved drugs. And finally FDA has taken several concrete steps to do just that. This month FDA announced a new regulatory class of generic drugs called the “Priority generics”. FDA would prioritize review of ANDA applications for drugs with less than three generic versions, drugs on shortage, used to support government health initiatives, and during health emergencies. Obviously, generic drugs can still not be developed for drugs with pending market exclusivity periods or unexpired patents, but there are hundreds of drugs with no generics although the drug has been there in the market for decades with no legal reasons impeding generic versions. There are several reasons why a drug would not have generic versions; it has a small market, there are new drugs for the target indication making the older drugs less appealing to doctors and patients, or the information of the unique status of the drug is known to a few insiders who take advantage of the monopoly. The last category has been in the news for the last few years when prices of old drugs were gouged exponentially by manufacturers taking advantage of the legal but unethical loophole in the US regulations. Now, FDA not only has announced programs to promote generic versions of such drugs, it has also published a list of all drugs that have few or no generic versions. More so, FDA has published a list of drugs for which generics are not feasible for legal or technical reasons, but 505(b)(2) versions are possible. These lists will be updated every 6 months. These measures are reasonable and practical, and give FDA credence as an Agency seriously trying to help control drug prices. However, the practical impact of these measures will be limited. It certainly creates an environment where generic drugs with reasonable market can be developed faster so episodes such as darapmin and cuprimine can be avoided, but many of the drugs with no generics are there because there is little financial incentive to develop such generics. Now that the list is public, it is being reviewed by practically every generic manufacturer for promising targets. Which means that any drug that is above average in terms of financial returns will have several generics soon, while the bulk with little market size will stay as is. In some ways, it may have a negative impact than what FDA intended. Some of the old drugs have gone out of favor with manufacturers due to very small market sizes but still have patients who benefit from them. Such drugs will likely not see many generics despite FDA’s move. From a practical point of view, these measures will have very limited impact on the reducing the cost of health care.  But one has to give credit to FDA for trying.