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Generic Drugs Achieve Record FDA Approvals, Aim to Lower Prices

News  |  By Jack O'Brien  
   December 12, 2017

As the FDA continues to approve generic drugs at a record clip, patients see the potential for reducing costs while nonprofits hope for increased availability of generics during a nationwide shortage.

FDA Commissioner Scott Gottlieb, MD, released the latest data last week on approvals of generic prescription drugs. Through November, the FDA has granted 929 approvals or tentative approvals for generic drugs, at an average rate of 84.5 per month this year. This past month saw 107 generics earn approval, besting the previous all-time high of 101, a record the FDA had just set one month prior.

The FDA has seen its generic approvals record reset in recent years, rising from 726 in 2015 to more than 800 in 2016. The agency says the approval of multiple generics to an existing brand-name drug encourages a competitive marketplace to ensure lower prices for consumers.

President Donald Trump has named lowering prescription drug costs among his goals in office, as have leaders on Capitol Hill.

Typically, generics drive down drug prices by as much as 80%, according to the Commonwealth Fund. That saved Americans $253 billion last year and saved the U.S. healthcare system $1.67 trillion from 2007 through 2016, according to the Association for Accessible Medicines 2017 report on generic drug access and savings.

Understanding the process and its changes

The current FDA approval process for generic drugs is based on a comparison with the brand-name drug to ensure the new product “demonstrates bioequivalence.” FDA approvals are not based on price considerations, though Gottlieb has indicated a willingness to move proactively against anti-competitive behavior by approving lower-cost generics.

Since his appointment in May, Gottlieb has also focused on addressing the strategic steps that brand-name pharmaceutical manufacturers take to impede the proliferation of generic competitors. These include listing additional patents with the FDA and limiting access for generic manufacturers to drug samples.

The agency has enjoyed success from a series of approval programs which have reduced waiting times by almost a year, the Los Angeles Times reported. These fast-track programs were instituted in 1997 and 2012, with a broad focus on streamlining the approval process for all drugs applying to the FDA. 

Problems persist while progress is made

Despite positive results regarding cost reduction and fostering competition, the agency faces a substantial budget cut next year while a significant number of generics still await examination for approval.

Though generics have received increased approval in recent years, hospitals across the U.S. still face a severe shortage of even the simplest medical solutions. While the U.S. has enforced price caps on necessary antibiotics and other simple drugs for hospital procedures, major pharmaceutical companies have been seen as more profitable opportunities in creating drugs which will target rare diseases.

In May, The New York Times reported on the FDA’s database of drug shortages, which lists over 50 drugs including three types of penicillin, sterile talc powder, and sodium bicarbonate injections.

Generic drugs remain so scarce throughout some parts of the U.S. that several hospitals have started manufacturing batches of their own generics to treat patients.  

Jack O'Brien is the Content Team Lead and Finance Editor at HealthLeaders, an HCPro brand.

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