FDA Commissioner Gottlieb Focusing on Generics to Address High Drug Prices

FDA Commissioner Scott Gottlieb, MD, said that the agency is examining how to push drug applications to “the front of the line” when there are fewer than 3 competing manufacturers for generic versions of a particular medication. In a telephone interview with Bloomberg on June 5, 2017, Gottlieb said that he is considering bringing more price competition to the market for generic drugs, targeting high-priced products by prioritizing the approval of other competing drugs. This practice would be a change for the FDA, which generally prioritizes applications for the first company to apply for a generic version of a brand-name product. The FDA has not typically considered drug costs a major policy goal, and is barred from taking cost into account when deciding whether to approve new drugs.

The new policy would target situations in which there are few or no competing versions of drugs available, because this scenario has led to high prices in some cases, including the notable case of Turing Pharmaceuticals’ increase in the price of Daraprim, a decades-old anti-infective, from $13.50 to $750.00 per pill after the company purchased the rights to the drug. Gottlieb said that adding generic competition would create lower prices. That idea is backed by research conducted by IMS Health, which found that drug prices start to fall significantly when there are 3 competing drugs available. The first generic drug to be marketed lowers the price compared to the branded product only slightly; a second generic competitor lowers the price to almost half that of the branded version; and third generic approval lowers the cost to 20% of the branded product’s price.

Gottlieb’s plans to address drug prices have been front and center since his appointment as FDA Commissioner. Gottlieb is also looking at a plan to eliminate a backlog of over 2600 generic drug applications within 1 year, and has mentioned preventing brand-name drug makers from using programs in which manufactuers restrict distribution of their products in order to keep generic drug manufacturers from accessing enough of each product for testing, which can require some 3000 pills. The FDA is also considering whether it can publish a list of 180 brand-name drugs that have lost patent protection and that still have no generic competition. Gottlieb believes that publishing such a list might create compelling business opportunities.

The FDA will also look at ways to speed the approvals process of generics for so-called complex drugs, including the EpiPen and asthma inhalers (medications that have associated delivery devices), as well as injected medicines like Copaxone (which have more complicated structures than simple pills do). Proving equivalence for these drugs is difficult because generic drug makers can have problems demonstrating that their generic versions of the drugs, together with the delivery devices used, are equivalent to those of the name brand drug.

In Congress, efforts to address high drug prices are set to continue. The Senate Health, Education, Labor and Pensions Committee is planning a June 13, 2017 hearing on the cost of prescription drugs that is expected to discuss the roles played by pharma companies and pharmacy benefit managers (PBMs) in rising drug prices. The FDA will also hold a public hearing in the next several months to discuss ways to facilitate generic drug competition. Pharmaceutical companies are bracing for the steps that several top pharmaceutical CEOs expect President Trump to take within the next few weeks to months in order to address high US drug costs. Health and Human Services Secretary Tom Price has been meeting with pharmacists, health professionals, and PBMs in recent weeks to discuss improving drug affordability.