Martin Sipkoff
MANAGED CARE February 2008. ©MediMedia USA

A recently announced initiative is supposed to speed approval of generic drugs, but does it address some fundamental flaws in the approval process?

The Food and Drug Administration has a backlog of more than 1,300 abbreviated new drug applications (ANDAs) for generic drugs, with about 800 more ANDAs expected this year. That’s double the backlog just two years ago. To address this growing problem, the agency recently announced the Generic Initiative for Value and Efficiency (GIVE) program.

“We expect the backlog of pending applications to increase,” says Gary Buehler, director of the FDA’s office of generic drugs in the Center for Drug Evaluation and Research. “The purpose of the GIVE initiative is to keep pace with the increasing number of generic drug applications.”

Buehler says GIVE will “increase the number and variety of generic drug products available.” Faster approval times for generic copies of medications approaching patent expiration could also boost competition significantly and drive prices down faster.

Market demand

Market demand for generics is certainly increasing, and patent expirations have surged in the last two years. According to IMS Health, prescription drugs with combined sales of $10 billion lost patent protection in 2007, on top of drugs with sales of $19 billion losing patent protection in 2006.

These market opportunities are an incentive to the growing number of manufacturers of generics. At the same time, health care cost-containment efforts by private and public insurers are increasing demand: About 2 out of 3 drugs sold is a generic. In 2006, the average retail price of a generic drug was $32.23, compared to $111.02 for a branded medication, according to the National Association of Chain Drug Stores.

Office of Generic Drugs

The FDA’s Office of Generic Drugs approved 682 products in fiscal year 2007, a 30 percent increase over the previous year. But the agency’s average approval time for generic drugs is about 17 months, according to the FDA. This is far longer than the six months required by federal law.

The FDA now has 215 full-time staff members dedicated to the review of ANDA filings for generic drugs. Under GIVE, the agency will employ more people to undertake reviews, although the number of new staffers has not been publicized.

The program is also designed to raise efficiency by enhancing software for handling submissions and internal documents relating to reviews.

It will also improve coordination and resource sharing with other FDA departments, say officials. And GIVE will provide training on correct application processes to manufacturers to reduce time spent on resolving problem applications.

An ANDA is required to prove that the generic has pharmaceutical equivalence, i.e., the generic product contains the same active ingredients as what the FDA calls reference listed drugs or RLDs. It must be identical in strength, dosage form, and route of administration, and meet applicable standards of strength, quality, purity, and identity.

Significant adjustments

GIVE changes none of that, but it makes two significant adjustments in the ANDA process: First, it institutes a new review process for the chemistry, manufacturing, and data in the ANDA, known as a question-based review or QBR.

The idea behind QBR is to provide preemptive information to drug manufacturers in question form that facilitates a subsequent review of products and processes.

The reviews assess formulation and manufacturing variables, set regulatory specifications, and determine the safety and quality risk associated with manufacture and design. “That way we maximize efficacy, improve safety profiles, and enhance the chemistry, manufacturing, and controls process,” says Buehler.

Although the Generic Pharmaceutical Association (GPhA) has no problem with this review process change, Kathleen Jaeger, president and CEO is concerned that GIVE is to some degree placing the cart before the horse. It fails to address the “serious legislative and regulatory issues that must be addressed to yield a true increase in the number of affordable generics brought to market,” she says.

“The FDA has tinkered with programs and initiatives designed to increase efficiency, but there are other important issues that could result in a true increase in the number of affordable generics brought to market,” says Jaeger.

They include the citizen petition process, the quality of scientific consults, communication within the FDA and with manufacturers, and the structure and accountability of the entire office of generic drugs, she says.

Re-ordering priorities

A second significant change reflected in GIVE is a re-ordering of ANDA review priorities. GIVE places a new priority for “first generic” products for which there are no extant blocking patents or exclusivity protections on RLDs. Those ANDAs will be identified as such at the time of submission.

The aim is for the FDA to speed up the path to commercialization for products that can enter the market right away, say FDA officials.

Under FDA rules, tentative approvals are awarded to generic products that have been deemed to meet the safety and efficacy standards necessary for marketing. The agents cannot be awarded full approval for sale because they would at that time be in violation of a patent on an existing RLD.

If the FDA is notified by the patent holder that it is suing the generics manufacturer, the FDA imposes a 30-month stay of approval. If the 30-month stay expires and no settlement has been made, the FDA can issue a full approval of the application.

But if the generics manufacturer should eventually lose the suit, it may be held responsible for damages against the RLD holder, says Buehler.

Generics manufacturers worry that this change will inhibit at-risk launches.

And GIVE may provide a further incentive for RLD manufacturers to adopt methods of extending the life cycles of their older drugs, such as novel drug delivery systems and/or new disease indications.

User fee program

The GIVE program, which combines elements of several existing programs, does not address the fundamental problem of OGD underfunding, say GPhA officials. OGD now receives about $30 million a year, a fraction of the more than $400 million allocated to the Office of New Drugs. About half of that comes from user fees paid by the makers of brand-name medications when they submit applications to market new drugs.

The GPhA recognizes that the Agency needs more staff and resources to meet its workload. To provide increased resources and enhance the generics approval process, GPhA and OGD have entered into discussions about creating a user fee program or makers of generic drugs, similar to the one now in place for branded drug manufacturers. Any such program for the makers of generics would have to be approved by Congress.

If a generics user fee program is to guarantee that generic drugs are reviewed and approved more quickly, it should “include robust performance measures, a high degree of certainty in the review and approval process, recruitment and retention of reviewers, and it should close barriers to public access to generics. If the FDA and Congress do not address these long-existing fundamental issues, we will be doing little to help consumers get the affordable medicines they needs,” says Jaeger.

Contributing Editor Martin Sipkoff is a long-time health care journalist.

Managed Care’s Top Ten Articles of 2016

There’s a lot more going on in health care than mergers (Aetna-Humana, Anthem-Cigna) creating huge players. Hundreds of insurers operate in 50 different states. Self-insured employers, ACA public exchanges, Medicare Advantage, and Medicaid managed care plans crowd an increasingly complex market.

Major health care players are determined to make health information exchanges (HIEs) work. The push toward value-based payment alone almost guarantees that HIEs will be tweaked, poked, prodded, and overhauled until they deliver on their promise. The goal: straight talk from and among tech systems.

They bring a different mindset. They’re willing to work in teams and focus on the sort of evidence-based medicine that can guide health care’s transformation into a system based on value. One question: How well will this new generation of data-driven MDs deal with patients?

The surge of new MS treatments have been for the relapsing-remitting form of the disease. There’s hope for sufferers of a different form of MS. By homing in on CD20-positive B cells, ocrelizumab is able to knock them out and other aberrant B cells circulating in the bloodstream.

A flood of tests have insurers ramping up prior authorization and utilization review. Information overload is a problem. As doctors struggle to keep up, health plans need to get ahead of the development of the technology in order to successfully manage genetic testing appropriately.

Having the data is one thing. Knowing how to use it is another. Applying its computational power to the data, a company called RowdMap puts providers into high-, medium-, and low-value buckets compared with peers in their markets, using specific benchmarks to show why outliers differ from the norm.
Competition among manufacturers, industry consolidation, and capitalization on me-too drugs are cranking up generic and branded drug prices. This increase has compelled PBMs, health plan sponsors, and retail pharmacies to find novel ways to turn a profit, often at the expense of the consumer.
The development of recombinant DNA and other technologies has added a new dimension to care. These medications have revolutionized the treatment of rheumatoid arthritis and many of the other 80 or so autoimmune diseases. But they can be budget busters and have a tricky side effect profile.

Shelley Slade
Vogel, Slade & Goldstein

Hub programs have emerged as a profitable new line of business in the sales and distribution side of the pharmaceutical industry that has got more than its fair share of wheeling and dealing. But they spell trouble if they spark collusion, threaten patients, or waste federal dollars.

More companies are self-insuring—and it’s not just large employers that are striking out on their own. The percentage of employers who fully self-insure increased by 44% in 1999 to 63% in 2015. Self-insurance may give employers more control over benefit packages, and stop-loss protects them against uncapped liability.