FDA: New user fee program to speed generic approval process
It’s been long accepted that politics makes strange bedfellows. That’s certainly the case with the reauthorization in 2012 of the Prescription Drug User Fee Act.
Leaders in both the branded and generic drug industries praised the reauthorization last June of PDUFA, the 20-year-old system by which research-based pharmaceutical companies help fund the government’s expensive review and testing process for new drug applications.
The concept of charging user fees to pharmaceutical manufacturers to help fund the Food and Drug Administration’s review and approval process was first established in 1992, and by law Congress must vote to reauthorize the User Fee Act every five years. But now, for the first time since PDUFA was created, the generic industry also is helping to foot the bill.
The law included Generic Drug User Fee Amendments [GDUFA], creating a system of user fees that generic drug companies will pay to the FDA when they apply for approval of a drug. The new user fee system took effect Oct. 1, 2012, and is projected to raise $299 million per year over five years, adjusted for inflation.
GDUFA will help the agency hire extra staff and add other resources to help clear a huge backlog of 2,500 generic drug approval applications awaiting review. The money will supplement what Congress appropriates to the FDA each year, "and will enable the FDA’s Office of Generic Drugs to hire the scientific resources needed to provide timely approval of generic medicines," said the Generic Pharmaceutical Association.
GPhA president and CEO Ralph Neas called PDUFA and its GDUFA amendment "the most important pharmaceutical legislation since the 1984 Hatch-Waxman Act," referring to the landmark compromise that unleashed generic competition, while ensuring that "all participants in the U.S. generic drug system, whether U.S.-based or foreign, comply with our country’s strict quality standards." And John Castellani, president and CEO of the Pharmaceutical Research and Manufacturers of America, said the law served "the best interests of America’s patients."
GDUFA could dramatically speed up the pace of generic approvals, providing a boon to the me-too drug industry and potentially saving health plan payers and patients billions of dollars in coming years. But the new funding also will spur development of bioengineered and biosimilar medicines by providing the FDA "with the resources necessary to help build new scientific and regulatory capabilities … and promote ongoing biopharmaceutical innovation," according to Castellani.
In an address to generic industry leaders at a meeting of the GPhA in 2012, FDA commissioner Margaret Hamburg acknowledged the agency’s desperate need for the funding provided by GDUFA. "It’s no secret that there’s a significant and growing backlog at the FDA of applications for new generic drugs," she said. "Currently, it’s about 2,500. And over the last several years, the time it takes to get a generic drug approved has nearly doubled, while the backlog is growing."
"Applications have grown at an astounding rate, reflecting the success of the industry. But resources have not grown at the same rate," Hamburg continued. "Chronic underfunding has left us without the necessary scientific and human resources to evaluate applications as quickly as we … would like. We are seeing applications for more complex products. And applications frequently involve products manufactured outside of the United States."
Indeed, said the FDA’s top official, "in our increasingly globalized economy, up to 40% of all drugs Americans take are imported … and up to 80% of the active pharmaceutical ingredients in those drugs come from foreign sources. This certainly complicates our inspection process."
Hamburg cited one Government Accountability Office report, noting that "in the absence of a paradigm shift — including new resources and new ways of doing things — it would take the FDA nine years to inspect all foreign facilities."
"User fees for generic drugs or GDUFA will address our current generic drug review backlog caused by the increase in generic drug applications, their growing complexity and the number of generic drug facilities now located overseas where inspections are more challenging," noted Hamburg. "The added money from user fees will reduce this backlog and eventually ensure that the FDA is able to inspect overseas facilities as often as it does domestic facilities."
The agency predicts that "by the fifth year of the program, the FDA will review and act on 90% of complete electronic generic applications within 10 months after the date of submission." Agency officials predicted that GDUFA fees would "cost the generic drug industry less than 10 cents for the average generic prescription."
"The annual fee total for GDUFA represents only about one half of 1% of generic drug sales," the FDA predicted in a report. "This relatively small cost to the industry could be offset by faster review times that bring products to market sooner."
Court OKs suit vs. branded firms over side effects of generic drugs
Alabama’s Supreme Court ruled in January that brand-name drug companies could be sued if patients suffer complications from generic versions of their medicines, according to published reports. According to the New York Times, an Alabama man named Danny Weeks claimed he developed tardive dyskinesia after taking generic versions of Pfizer’s acid reflux drug Reglan (metoclopramide). Pfizer acquired rights to the drug when it bought Wyeth in 2009, and generic drug makers Teva and Actavis, now owned by Watson, make generic versions.
Weeks had originally filed the suit in federal court, but the court asked the Alabama Supreme Court to determine if Weeks could sue the branded drug makers.
Under Food and Drug Administration regulations, generic versions of branded drugs must use the same safety labeling as the branded versions, and the Times noted that a 2011 Supreme Court decision, Pliva v. Mensing, determined that generic drug companies had no control over what drug labels said, meaning they could be sued for failing to inform patients of safety risks.
Canadian provinces to cut generic payments
Canadian generic drug makers expressed dismay over a new plan to reduce reimbursements for a half-dozen generic medications in most of the country’s provinces. According to published reports, a group of premiers had reached a coordinated deal to reduce the prices their governments paid for six generic drugs, hoping to save the provinces nearly $100 million.
Quebec did not take part; that province announced in November 2012 the elimination of its "15-year rule," a rule unique to the province that required its prescription drug plan to reimburse the price of the original drug even after patent expiration had made cheaper generics available. Currently, provinces pay between 25% and 40% of the cost of branded drugs for six key generics, but under the deal, they will pay 18% starting in April.
The drugs are the generic versions of Pfizer’s cholesterol drug Lipitor (atorvastatin); King Pharmaceuticals’ blood pressure drug Altace (ramipril); Pfizer’s antidepressant Effexor (venlafaxine); Pfizer’s angina drug Norvasc (amlodipine); AstraZeneca’s gastroesophageal reflux disease drug Prilosec (omeprazole); and Eisai and Johnson & Johnson’s GERD drug Aciphex (rabeprazole).
While praising a decision by the provincial governments not to pursue a plan to tender for generic drugs, the Canadian Generic Pharmaceutical Association was displeased with the reimbursement reduction.
"CGPA is pleased that provincial governments have decided not to proceed with tendering for generic pharmaceutical products. Tendering for generic drugs could result in drug shortages and delayed savings to Canada’s healthcare system." CGPA president Jim Keon said. "We are, however, disappointed by the provincial governments’ announcement of further cuts to retail or reimbursed prices for generic prescription medicines."
While generics account for 80% of dispensed prescriptions in the United States, the equivalent rate in Canada is more than 60%, according to IMS Health.