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FDA White Paper: New FDA Initiativeon "Improving Access to Generic Drugs"
FDA, June 12, 2003
Bringing low-cost generic drug
alternatives to consumers more quickly can significantly reduce overall
health care costs, and increase access to life saving medicines that are
just as safe and effective as their brand-name counterparts. Part of the FDA's mission is to make sure that the generic
drugs approved for use in the United States are just as safe and effective
as the brand-name versions of the drugs. Generic drugs can be very helpful
for patients because their price is typically much lower: while the
average price of a brand-name prescription-drug is $72, the average price
of a generic version is about $17. This is an especially important source
of drug savings now, because a growing number of important brand-name
medications coming off patent -- more than 200 of them in the next few
years. FDA's new final regulation to improve implementation of the
Hatch-Waxman amendments to the FFDCA -- the section of the law that
governs how and when generic drugs can compete with brand-name -- will
lead to billions of dollars in lower drug costs each year. But this rule
and the legislative proposals involving the Hatch-Waxman amendments only
affect a fraction of new generic drugs. There
are two other obstacles to helping all consumers get greater savings from
generic drugs: ·
Long approval times for generic
drugs: On average, it takes more than 20 months for a new generic drug to
be approved by the FDA. Companies need to demonstrate that their products
contain the same active ingredient, are manufactured to the same quality
standards, comply with good manufacturing practices, have similar
labeling, and have the same "bioavailability" (that is, the same
availability of the active ingredient when used in the body) as the
brand-name drug. Generic drug applications take long to be approved
because it typically takes multiple "review cycles" for these
generic drugs to be approved by FDA -- a long process that adds to the
costs of developing generic drugs and significantly delays the
availability of these low-cost alternatives for consumers. ·
Opportunities to improve consumer
knowledge and safe use of generic drugs: Surveys have indicated that many
health care practitioners and patients are not aware that generic drug
alternatives are available, or that the generic alternatives act the same
way as the brand-name drugs -- that they are just as safe and effective.
Health care practitioners and consumers may also be concerned about the
state of scientific knowledge about generic drugs that are available, and
want assurances that the science base is strong and that adverse events
can be discovered and addressed just as quickly as with brand-name drugs. As a result of these factors, even with improvements in the
Hatch-Waxman law, many additional billions of dollars in potential savings
are likely to go unrealized each year. With rising drug costs and the
potential for far more generic drugs to become available in the near
future, these are sources of savings that should not be overlooked. The FDA's initiative on Improving Access
to Generic Drugs was designed to address these challenges to the
availability of safe and effective, low-cost drugs. The initiative
includes the following components:
·
Unprecedented increase of $13
million in FDA resources devoted to improving access to generic drugs: The
President's 2004 budget proposes an additional $13 million in spending for
FDA's generic drug programs. This will be the largest infusion of
resources into the generic drug program ever, increasing the program's
size by about one-third. ·
New regulatory processes to reduce
the time and cost of generic drug approvals: Beginning in the next fiscal
year, the FDA will make significant changes in its processes for approving
generic drugs. In particular, the FDA will implement early communications
with generic drug manufacturers to discuss their applications. FDA will
increase the number of guidances available for generic manufacturers
regarding what is required to prepare and submit quality, complete
applications. FDA will also institute regular meetings with generic trade
associations to discuss the process for improving the quality of
applications and to impart information on changes in policies and
procedures. Studies of FDA processes for new drugs indicate that early
communications and more explicit guidances can often improve drug
applications and allow deficiencies to be corrected while an application
is under review, rather than having to wait for additional review
cycles to fix problems. This can significantly reduce the time it takes to
approve a drug. ·
Enhanced public education and
scientific study of generic drugs: The FDA will expand its educational
programs and partnerships involving generic drugs, to help health care
practitioners and consumers get accurate information about the
availability of generic drugs for their health care needs. FDA will also
undertake additional scientific studies of certain types of generic drugs
where adequate bioavailability methods have not been adequately developed,
to make it easier to approve these generic drugs. FDA will also enhance
the monitoring of the safety of generic drugs currently on the market. These steps to improve access to generic drugs are expected
to reduce the average time for most generic drug approvals by 3 months or
more. Because this approach to increase availability will apply to all
generic drugs, it can have a substantial impact on health care costs. In
particular, faster access and a lower-cost approval process for the
hundreds of generic drugs expected to come on the market would be expected
to save consumers many billions. Improved consumer education and generic
drug science will also likely lead to additional savings from greater
confidence and use of generic drugs. Background
The number of new generic applications received is expected
to continue to grow above last year's record level of 361 abbreviated new
drug applications, or ANDAs (these are the applications that drug makers
file with the FDA for permission to sell a new generic drug). The
projected figure for FY 2003, based on 8-months of data, is 465. Encouraging rapid and fair access to generic medications is
one of the FDA's major priorities. Americans need generic drugs more than
ever, and FDA is implementing new programs to help make these products
available sooner. There are many steps involved in achieving this goal.
FDA has recently expanded its generic drug program to act on generic
applications faster, but the growing number today -- and expected further
increases in the coming years -- means that the FDA's resources are
increasingly being stretched. Challenges of making low cost generics
available:
Despite the growth in the submissions of applications for
approval of new generic drugs (original abbreviated new drug applications,
or ANDAs) from 326 in FY-1999 to 361 in FY-2002, FDA's generics program
during the same time increased the proportion of applications reviewed
within 180 days from about 35% to 80%. The average time required for a
first review of an ANDA is down to 100 days, from 135-140 days in the late
1990s. These substantial improvements were made possible by rising
efficiency in the Office of Generic Drugs, as well as by increased
resources -- the appropriations for the FDA's generics program increased
by $1.4 million in 2001 and by another $2.5 million in 2002. Additional funding has helped to increase FDA's rate of
reviewing and approving generic applications. The number of full and
tentative generic applications approved has gone up significantly, from
266 in FY-1999 to 364 last fiscal year - an all-time record. (A
"tentative" approval granted to a generic applicant that has
demonstrated their product is safe and effective, but cannot yet enter the
market because relevant patents have not yet expired or are in dispute.
The FDA's new final rule on implementing the Hatch-Waxman amendments will
reduce the time to approval for applications with paragraph IV
certifications and will reduce the number of disputes related to patent
listings. These disputes occur for a fraction of generic drug
applications, though they tend to involve drugs that have high annual
sales.) These significant improvements in FDA's approval times and
median times to the issuance of an approval or "tentative
approval" letter -- which used to be longer than two years -- have
not decreased in proportion to the percentage increase in approvals. The
average total time for a generic drug to be approved still remains above
20 months. That means, even as the FDA is making large strides in
increasing the number of approvals, there is still substantial room for
improvement in total time to approval. Although many generic applications
have been approved within one year, this timeframe is still the exception
rather than the rule. The reason that total time to approval or tentative approval
is not significantly declining is due to several factors, including
multiple review cycles that are required before these applications are
approved. Based on FDA's most recent statistics from all generic
applications in 2001 and 2002, 93% of generic drug applications are not
approved on the first cycle of review; and 66% are not approved even after
the second cycle of review. A review of these multiple-cycle reviews demonstrate that
many generic applications do not contain sufficient information to permit
the FDA to approve the application after the first review cycle, and
frequently the FDA cannot approve even after the second or third cycle.
Review times and costs would be lower if generic manufacturers initially
submitted high-quality applications that permit approval after the first
review cycle. FDA's current policy of not providing any substantial
communication about deficiencies in an application until after the first
cycle is completed is contributing to these problems. It is likely that
some important deficiencies could be identified earlier and possibly
avoided, thus improving review times. Among the approximately 100 generic firms that regularly
submit applications to the FDA, there are many whose ANDAs usually include
few deficiencies, and can be approved in a timely manner. But there are
also manufacturers who lack the necessary experience in developing their
applications, and, more importantly, there are many manufacturers who do
not perform adequate product development before they submit their initial
application. Also, often they lag in providing the additional information
FDA needs, even after the application is rejected on the first cycle. The
result is multiple cycles and many months of delays in generic drug
availability, even if FDA handles each cycle efficiently and succeeds in
reducing the "cycle time." Early communication leads to better
applications and faster reviews:
In the past, FDA has not provided the kind of ongoing
communication with generic companies in developing their applications.
This communication is an integral and expanding part of FDA's ongoing
effort to implement smarter, more efficient regulation to reduce the costs
of developing safe and effective regulation of new drug products. Generic
manufacturers have not had the advantage of informative consultations with
FDA reviewers early in the review process that have been shown to be
effective in reducing the occurrence of multiple-cycle reviews for new
drugs. There have been two major reasons why FDA has not provided
this type of clear and effective communication in the past. One constraint
has been available resources: the staff of FDA's generic drugs program has
not been sufficient to provide a high level of communication to improve
understanding of approval requirements in particular cases. The second
main obstacle to effective communications has been FDA's internal
policies, which have discouraged early consultations between the Office of
Generic Drugs (OGD) reviewers and sponsors of ANDAs. Finally, another factor limiting the availability of low cost
generic alternatives is the lack of adequate methods for determining that
certain types of generic drug products (such as inhalation suspensions)
are equivalent to the branded drugs. Right now, there are no clear
standards for developing generic versions of certain types of drugs,
because, until recently, the regulatory methods have not been developed to
make these determinations. Features of FDA Initiative on Improving Access to Generic Drugs
Improvements in FDA generic drugs programs
made possible by new appropriations:
The Agency can and will do more to improve the efficiency of
our reviews. Acting quickly on generic drug applications is well worth
even greater FDA resources. To improve reviews, the FDA has requested a
$13 million appropriation in FDA's 2004 fiscal year budget to help develop
the tools and infrastructure needed to bring more safe and low-cost
generic alternatives to consumers. This funding request, which increases
the 2003 budget of approximately $45 million by about one-third, will help
the FDA to address immediate concerns that could slow the ability of the
Agency to make more, low-cost generic alternatives available to consumers. More staff to be able to review
applications on a timely basis and facilitate more extensive, early
communications with generic manufacturers:
The FDA will be able to hire about 40 additional staff in
generic drugs and expand the new chemistry review division in the OGD.
This expansion should help reduce the average review time by at least two
months, increase the percentage of reviews that are completed within 180
days, approach the goal of reviewing 100% within 180 days and further
reduce the time it takes FDA to review. The additional staff will include additional medical officers
to review generic drug applications and additional scientific staff to
focus on novel products for which there aren't yet clear standards. These
changes will enable FDA review staff to interact more with generic drug
applicants, clarifying requirements and providing more early advice. In
particular, FDA will develop and implement a standard, fair protocol for
providing initial feedback to applicants about obvious minor deficiencies
in generic applications within 10 days after the first cycle review is
completed. Generic applicants who respond to these comments in a timely
fashion will be able to amend their application, potentially avoiding an
additional review cycle and accelerating approval by 3 to 6 months or
more. In addition, at the conclusion of the first review cycle for
all other ANDAs, FDA will initiate a teleconference with each applicant to
discuss the deficiencies identified. Policies will also be revised to
allow telephone communication during the initial review cycle for
clarification and resolution of minor review issues. OGD will issue
guidance in early FY-04 describing these policy changes. Experience in
other areas of the FDA's drug review efforts have shown that these early
interactions reduce the time and cost of product approvals by reducing the
number of cycles an application goes through. More efficient ways for determining that
new generic drugs are as safe and effective as their branded alternatives:
About $1.3 million of this money will be appropriated to
developing simple and effective ways other than comparative clinical
trials to determine therapeutic equivalence of branded and generic drug
products including certain dermatologic drug products. Another $1.5
million will be earmarked to developing methods for assessing the
equivalence of inhaled suspension products. And another $1.5 million will
be used to develop methods for assessing other novel drug delivery
systems, such as liposomes. Right now, there are no clear standards for developing
generic versions of these types of drugs and the regulatory methods for
approval need to be elucidated. As a result, even though relevant patents
have long since expired, there are few if any low-cost generic options
available for patients using certain inhalation suspensions to treat
asthma and certain dermatologic medications. Patients currently spend
billions of dollars each year on such medications; therefore, significant
cost savings can be realized as a result of marketed generic products. Greater efforts for informing consumers
about the safety, effectiveness, and value of generic drug options:
As the President said in October, "generic drugs are
just as safe and effective as brand-name drugs." Yet there is
considerable evidence that many consumers do not view generic drugs in
this way. In FY-02 and FY-03, Congress provided $400,000 to increase the
consumer awareness of the rigorous generic drug review process and quality
of generic drugs. An additional $400,000 will be expended in FY-04 to
continue this program. Through outreach into the medical and lay community
through newspaper articles, posters on buses, in pharmacies, and in
magazines and partnering with many third-party prescription programs, this
program will dispel many myths about generic drugs and help doctors to
prescribe them, as well as assist consumers in learning about the
availability and safety of these low-cost alternatives. As generic drugs become
increasingly important in American medicine, we must learn more about
their potential for presenting safety and adverse event problems: For this reason, some of the additional generics funding will
be used to enhance our "post-market" monitoring of adverse
events involving generic drugs. This is an important and integral part of
the FDA's agency-wide patient safety initiatives. The Agency must have mechanisms in place to quickly learn
about all drugs-associated safety concerns and take prompt corrective
actions, such as informing health care providers and patients how to avoid
the potential hazards. This will involve greater use of electronic health
information systems, including bar coding and automatic reporting of
safety data. Three million dollars has been targeted in FY-04 to hire
additional safety evaluators in the Office of Drug Safety and to augment
the OGD's medical staff. Conclusion
All of these components of FDA's initiative on Improving
Access to Generic Drugs will make safe and effective drugs much more
affordable for millions of Americans. These steps -- including greater
funding for FDA's generics program; steps to improve the efficiency of
review cycles and to work collaboratively with industry to improve the
quality of generic drug applications; enhanced consumer education about
generic drugs; and better science to speed the development of additional
generic products -- can make a big difference in the nation's public
health. Overall, FDA expects to decrease the average time for approval.
Combined with FDA's new final Hatch-Waxman rule, this initiative promises
to provide many billions of dollars in drug cost savings each year --
without compromising FDA's high standards for safety and effectiveness of
the drugs that Americans use every day. Copyright
© 2002 Global Action on Aging
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