Q: Many pharmacists have told us that
reimbursements of Medicaid prescriptions based on AMP (average manufacturer
price) instead of AWP (average wholesale price) will have devastating effects
on their profits when it comes to dispensing generics. What effect do you
think AMP will have on the generic industry?
A: GPhA, along with a coalition of distributors,
pharmacies, and their respective trade associations, are working together to
ensure that the reimbursement model does not adversely affect pharmacies or
consumers' access to generics. While GPhA and its coalition partners share the
goal of ensuring that CMS [Centers for Medicare and Medicaid Services] and the
states have consistent data, rule changes must not undercut competition in the
marketplace. When competition is reduced, costs to consumers increase and
patient access to affordable generics is jeopardized.
Q: Many view "authorized generics" as a
positive for consumers since less expensive versions of brand name products
would be released to the market sooner. What impact do you think authorized
generics have on the development of generics through ANDAs (abbreviated new
A: Generic companies conduct their research and
development years in advance of patent challenges. That's why authorized
generics, if allowed to remain unchecked by Congress, could severely curtail
future patent challenges. This would allow brand companies once again to
evergreen patents and substantially delay consumer access to affordable
Under provisions in the Hatch-Waxman Act, the
first generic company to successfully challenge a questionable brand patent,
file an ANDA with FDA, and receive approval to market that drug product is
awarded 180-day exclusivity. This 180-day period was designed to permit the
generic company alone to compete with the brand company, allowing the generic
to recoup costs incurred for undertaking a patent challenge. Brand companies
are circumventing the Act's intent by introducing an authorized generic--which
is the brand's own product repackaged and marketed either through a subsidiary
or third-party--during this critical timeframe. The authorized generic does not
appear on the market prior to this time--so there is no early opportunity for
consumers to save. Moreover, authorized generics are considered brand products
by the FDA, so they do not have to go through the same rigorous approval
process required for true generic products.
The 180-day exclusivity period is a critical
incentive to bring generics to market in a timely manner. GPhA believes that
the use of authorized generics undermines the Hatch-Waxman Act by devaluing
this incentive. Ultimately, consumers pay the price as brand companies keep
drug prices high and access to affordable medicine is delayed.
Q: Have any strides been made to help increase
funding for the FDA's Office of Generic Drugs in effort to address the growing
backlog of generic applications?
A: For Fiscal 2007, Congress approved $5 million
in additional funding for the Office of Generic Drugs [OGD], but we are
hopeful that more funds will be approved for Fiscal 2008. Funding for OGD has
remained relatively flat over the past several years, and the backlog of
generic drug applications has continued to grow. Additional funding will
better enable OGD to review these applications more rapidly.
Q: Despite the fact that many legislators are
positive on the approval of biogenerics, the FDA and other regulating bodies
have their doubts. What do you see as the future of biogenerics?
A: Momentum is clearly growing for Congress to
approve legislation to bring safe and affordable biogenerics to patients in
need. More than 50 organizations representing millions of older Americans,
corporations, union members, patient groups, and other organizations, as well
as a distinguished group of governors, are calling for biogenerics to improve
the quality of care and reduce health care costs.
FDA has testified before Congress and has
emphatically stated that it has the ability to follow the science to approve
biogenerics. What it needs is the legal authority from Congress to do so. In
fact, FDA Deputy Commissioner Janet Woodcock stated in congressional testimony
that FDA now has the ability to review biogenerics of low to modest
complexity. And, in a recent white paper, Dr. Woodcock wrote that FDA uses a
"scientifically based, case-by-case basis" for the approval of
biopharmaceuticals--the same approach that is being advocated for biogenerics.
So it's clear that it's not a question of if
biogenerics are possible, but when Congress will give FDA the authority and
flexibility to review and approve them.
Q: Now that Medicare Part D has become part of
the health care system landscape, what effects do you see it's had on the
dispensation of generics?
A: CMS has actively promoted the use of affordable
generic medicines as a way for Medicare recipients to save money. In fact, 61%
of all Medicare Part D prescriptions dispensed are for generic medicines.
Thanks in part to the use of generics, CMS estimates that it reduced Part D
program costs by about $8 billion in 2006.
Q: The government is proposing user fees for
generic companies to help speed up approval of generic drugs. You've been
quoted as saying that the generic pharmaceutical industry would support paying
user fees "if the FDA and the Bush administration would guarantee legislative
and other regulatory changes." What would those changes be?
A: While user fees might result in faster review
times, they won't guarantee that medicines get to consumers faster unless
barriers to market entry are removed. The FDA can hire more reviewers and
speed up reviews, but if it doesn't deal with barriers like authorized
generics and citizen petitions, it won't get medicines to consumers any sooner.
GPhA is open to discussing options that would
bring medicines to consumers faster, but user fees cannot be discussed in a
vacuum. Paying user fees won't succeed in bringing generics to patients faster
as long as barriers like authorized generics, citizen petitions, and the
absence of a workable approval pathway for biogenerics continue to delay
generic competition. Congress and FDA must eliminate these barriers before
consumers see any real benefit from user fees.
To comment on this article, contact