FDA Knocking Off Drug Prices by Encouraging Knock-Offs

Traditionally, the Federal Drug Administration’s (FDA) role in pharmaceuticals is to ensure that products are safe and effective. Now, in response to public backlash against increasing complex drug prices, the FDA is taking a more active approach to drug prices and accessibility. The FDA is authorized to deal with matters which concern public health, however, it is expanding that definition to include increased access to more affordable life-saving drugs, in the form of generic versions of the existing medications. While the FDA is not engaging in price fixing, the new measures released in October 2017 will, according to FDA Commissioner Scott Gottlieb, help increase competition in the market by encouraging companies to invest in making generic versions of these medications.

 Rising costs of prescription drugs have been a topic of concern for the past two years. During the 2016 presidential election, both candidates promised to tackle the issue. In August 2017, the President reauthorized the Generic Drug User Fee Amendments (GDUFA) through September 2022. The GDUFA is accompanied by the FDA’s Drug Competition Action Plan which aspires to “advance new policies aimed at bringing more competition to the drug market” and improve consumer access to “complex generic drugs.” The FDA is primarily targeting drugs which are “protein-based or, like EpiPen, they require intricate delivery technologies such as auto-injectors.”

So far, the FDA has released two key measures to make the pathway to approval of generic versions faster and more affordable for applicants. First, the FDA issued a draft guidance to help Abbreviated New Drug Application (ANDA) applicants to request pre-ANDA meetings with the FDA. The FDA guidelines create three types of meetings: product development, pre-submission meetings to help with the ANDA, and mid-review cycle meetings to address concerns while currently reviewing the ANDA. Second, the FDA released a second draft guidance to help generics manufacturers of products known as peptides determine the appropriate timing for filing their ANDA. The FDA is focusing heavily on peptide-based generics because, despite the fact that exclusivity rights on most of the branded peptide products have expired, the brands face almost no competition. The FDA plans to release more materials “aimed at spurring competition” in the generics markets over the next few months. The idea is that with increased competition from generic versions of these life-saving medications, corporations will have to engage in competitive pricing instead of having a virtual monopoly on the market. Thus, the general consumer has greater access to the medications they need instead of being forced out of the market by high prices.

The FDA is not solely relying on outside companies, however, to develop new tools that improve generic drugs’ ability to compete. Instead, the FDA is working internally to develop better tools and alternatives to clinical testing, where it is feasible. The goal of producing better tools and testing methods is to shorten the amount of time it takes for generics to reach the market, thus increasing competition at a faster rate. According to an article posted on FiercePharma, a division of Questex, “some companies are already feeling the effects of Gottlieb’s focus on encouraging generic competition” as a result of the more active role the FDA is taking on the market.  Getting these alternatives into the market faster not only decreases costs to the consumer, but also provides a greater means of access to consumers since more companies are producing these medications.

All of these measures tie into the FDA’s larger role in society, namely addressing their mission to “advance[e] the public health by helping to speed innovations that make medical products more effective, safer, and more affordable.” From a legal standpoint, however, it raises the larger question of whether the FDA will be able to create a safe and effective method of testing these new generics to ensure they are reasonably similar to their branded counterparts. Because these drugs are life-saving, it is important for the FDA to not sacrifice safety for efficiency. Currently, under the GDUFA II, the FDA must review and make a final decision within 150 days of receiving and ANDA; however, the goal is to cut this timetable down to 60 days. While more testing is conducted on the approved generic once it is finalized, cutting down the process is a major goal of the GDUFA II.

Secondly, while it is already clear that the exclusivity rights to the formulas for these drugs have expired, the new emphasis on generics could lead to more brands relying on trade secrets to protect their ability to produce life-saving drugs to save their own bottom lines. Only time will tell if the FDA can incentivize pharmaceutical companies to buy into the push for generics and competition. But there is no doubt that many could certainly benefit from lower prices on life-saving medications.

Whitney is a Second-Year Law Student at Wake Forest University School of Law where she is a staff member on the Journal of Business and Intellectual Property Law. She is a proud graduate of the University of Virginia where she earned her B.A. in History and Government. Before returning to law school, Whitney enjoyed a career in New York working as an Account Executive in the advertising industry and plans to pursue Real Estate and Intellectual Property Law after graduation.