Generic Drug Industry Update From the GPhA

The availability of generic drugs is crucial not only to the overall healthcare system, but also to individual patients in ensuring that they are able to afford their prescription medications. Although generic drugs are used to fill 88% of prescriptions in the United States, they represent only a third of total drug spending.¹ Established in 2000, the Generic Pharmaceutical Association (GPhA) represents manufacturers and distributors of bulk active pharmaceutical chemicals, manufacturers and distributors of generic prescription drugs, and suppliers of other goods and services to the generics industry and is considered the nation’s leading trade association for manufacturers and distributors of generic prescription drugs and biosimilars.

The GPhA saw a change in leadership in July 2015 when the organization’s board named Chester “Chip” Davis, Jr, as the president and chief executive officer (CEO).² In that role, Mr. Davis is responsible for ensuring that the association serves “to improve the lives of patients and consumers by providing timely access to safe, effective, and affordable medicines.”³ The GPhA actively engages in scientific, regulatory, and health and public policy issues. Mr. Davis has experience in advocacy, having served as executive vice president for advocacy and member relations at the Pharmaceutical Research and Manufacturers of America (PhRMA). In that position he was responsible for leading PhRMA’s advocacy efforts in federal, state, and international government relations. Prior to joining PhRMA, Mr. Davis was vice president of corporate external relations for AstraZeneca, a member of its Corporate Affairs Leadership team, and vice chairman of AstraZeneca’s Political Action Committee. Mr. Davis earned an undergraduate degree in accounting from the University of Delaware, and a juris doctor degree from the University of Baltimore School of Law. He is a licensed attorney in Maryland, Virginia, and the District of Columbia and serves on the boards of a number of charitable organizations as well as on the Member Advisory Board of the National Journal.²

Since U.S. Pharmacist’s 2015 interview with the GPhA’s former president and CEO, Ralph G. Neas, notable areas for further comment have emerged. There are many ways to increase patient and health system savings by enhancing timely access to safe and effective generics. Patient access, patient safety, and efforts to control healthcare costs remain among the top GPhA priorities for 2016 and beyond. The GPhA and many health stakeholders are waiting for the finalization of the FDA’s Proposed Rule to update generic drug labeling requirements, while the GPhA’s Biosimilars Council continues its efforts to educate providers, payors, and policymakers as the U.S. regulatory framework for these medications takes shape.

Risk Evaluation and Mitigation Strategies (REMS)

In June 2015, Reps. Steve Stivers (R-OH) and Peter Welch (D-VT) reintroduced the Fair Access for Safe and Timely (FAST) Generics Act in the U.S. Congress. This bipartisan bill is intended to prevent some drug companies from misusing the FDA REMS programs and other non-FDA-mandated restricted access programs to avoid competition from less expensive generic drug alternatives.⁴

“REMS are FDA-mandated programs that provide additional information to patients and providers, and in certain cases restrict distribution of the product so that only specified entities have access to it.”⁴ This has enabled misuse, since “some companies establish voluntary restricted distribution networks to deny manufacturers of generic and biosimilar drugs access to product samples they need to obtain FDA approval and market entry.”⁴

According to the GPhA, the misuse associated with REMS and REMS-like programs is estimated to cost the public $5.4 billion annually. Does this include biosimilars?

Mr. Davis stated in a June 2015 GPhA press release that Matrix Global Advisors had conducted the study that made these findings. It projected that if the current misuse of REMS or similar programs designed for patient safety were extended to biosimilars, it could limit savings and hinder access to biosimilar medications, resulting in the loss of $140 million for every $1 billion in biologic sales.⁴

What is the FAST Generics Act and how would it help correct the current misuse?

Mr. Davis released the following statement on October 6, 2015: “The FAST Generics Act sets forth more explicit legal requirements and processes for the acquisition of product samples by generic and biosimilar developers, at the same time putting safeguards in place to protect public health.”⁵ He also pointed out that the act seeks to close the loopholes in current REMS programs that make these abuses possible. He further added that “Congress, the FDA, the generic drug industry, and a broad range of partners from all corners of the supply chain agree on the need to address these abuses.”⁵

In addition, the GPhA joined with 10 stakeholder groups and sent a letter to the Senate Special Committee on Aging following its hearing conducted to examine why there had been “price spikes in off-patent drugs.” The letter called for the FAST Generics Act to be considered in order to improve competition in the pharmaceutical marketplace, cut down on REMS abuses, and save the federal government approximately $2.4 billion over 10 years. The letter also pointed out that “competition from generic drugs has saved the health care system $1.68 trillion over the past decade and $254 billion in 2014 alone.”⁶

 “Misuse of FDA REMS patient safety programs is one way that certain brand drug companies delay generic competition,” continued Mr. Davis. “Failure to address the loophole that makes these abuses possible is a missed opportunity to encourage more competition in generic drugs and to generate billions of dollars in additional savings for patients and the health system.”⁶

GPhA’s Collaboration With Congress and the FDA

The GPhA, in a recent press release, noted that the Department of Health and Human Services (HHS) announced the results of a new analysis, which stated, “Evidence strongly supports the conclusion that generic drug prices are not an important part of the drug cost problem facing the nation.” Rather, the GPhA noted, “generic drugs drive savings, not costs” and declared further that Congress should “focus on increasing pharmaceutical competition and expanding access to safe, effective, and more affordable generic drugs” as a means to lower health costs.¹

The GPhA is on record for having said it is always looking forward to continued collaboration with members of Congress and the FDA to ensure safe and timely access to generic drugs and biosimilars. Specifically, what are you currently working on to ensure this access?

According to Mr. Davis, these facts were included in a February 2016 press release that outlines some of the GPhA’s current suggestions¹:

• The recent HHS analysis determined that about two-thirds of generic products appear to have experienced price declines in 2014, underscoring that generics are essential to health savings and continue to put more affordable treatments within reach for millions of patients.

• It is clear that generics are a long-term solution to rising health costs; however, Congress chose to increase the Medicaid rebate for generic drugs as part of the October 2015 budget agreement, a provision that will add significantly to generic manufacturers’ costs, making it much harder to produce generics across many therapeutic classes.

• The GPhA is concerned that this increased rebate could reduce generics competitors on the
  market, increasing vulnerable beneficiaries’ reliance on older, more expensive branded products, and causing Medicaid budgets to soar—the exact opposite of what millions of patients need. Congress has put Medicaid savings from generics ($33 billion in 2014) at risk.

The GPhA supports five solutions for increasing pharmaceutical competition.¹ This further underscores the GPhA’s mission to continue to highlight the undeniable role of generics in lowering health costs.

1. Ensure a fully resourced FDA can address the backlog of more than 3,800 generic drug applications stalled while waiting for approval and shorten FDA median generic drug approval timelines, which, at the industry’s best estimate, currently stand at 48 months.

2. Increase generic utilization among the low-income Medicare population, which could save up to $17.7 billion over 10 years.

3. Pass the bipartisan FAST Generics Act to curb some brand drug company abuses of FDA safety programs, such as REMS, used to keep generics off the market, an estimated savings of $2.4 billion over 10 years.

4. Work closely with industry and regulatory partners to ensure that the framework for biosimilars, safe and effective alternatives to costly brand biologic drugs, expands and expedites patient access. Estimated biosimilars savings range from $44 billion to $250 billion.

5. Repeal Section 602 of the Bipartisan Budget Act of 2015. The Medicaid rebate increase for generic drugs in the budget deal is bad for Medicaid and its beneficiaries, bad for taxpayers, and should be immediately repealed.¹

FDA’s Generic Drug User Fee Act (GDUFA)

There was an FDA public meeting on the GDUFA on June 15, 2015, to discuss strengthening the FDA implementation of the GDUFA. It appears that the general opinion within the industry is that the FDA has not strongly followed through on its commitment to seeing the GDUFA’s goals achieved. In a recent press release, the GPhA noted that the generic drug industry funds 100% of this $1.5 billion program; however, this process is now at its “midpoint” and renegotiations are now approaching.⁶

What are the goals of the FDA’s GDUFA program, which is funded by the generic drug industry? Is there a current backlog of reviews of generic drug applications? In your opinion, what more can and should the FDA be doing to improve the GDUFA?

Mr. Davis supports the same emphasis of his predecessor, Mr. Neas, stating that the GPhA and FDA share core GDUFA goals: improved safety, access, and transparency. In addition to the backlog of applications, the median review times for generic applications are getting longer. Industry experts estimate that the U.S. healthcare system lost more than $3 billion in savings due to first generic approval delays over the last year and a half. “In 2011, when the GDUFA began, median review time to approval was at 30 months. Since then, median review times increased to 31 months in FY [fiscal year] 2012, 36 months in FY 2013, and an estimated 42 months in FY 2014. At the industry’s best estimate, the FY 2015 median approval times will be 48 months—the slowest it has ever been.”⁷

The FDA still has $277 million in unused funds from the generics industry that could be applied to site inspections or approvals.⁷

FDA Proposed Rule on Generic Drug Labeling

In March 2015, the GPhA submitted comments on the FDA’s Proposed Rule to update generic drug labeling requirements. The Proposed Rule would require generics companies to unilaterally update labels without prior FDA approval, elevating patient safety risk, raising costs, and causing confusion among prescribers and providers.⁸

What are the GPhA’s primary concerns regarding the FDA’s Proposed Rule on generic drug labels?

“Current law requires brands and generics to carry the same label to assure healthcare practitioners have consistent information to inform their decisions and patient conversations,” Mr. Davis stated.⁹ “The Proposed Rule would change this by requiring generic manufacturers to update labels based on incomplete information without first receiving FDA approval. However, no single manufacturer has access to the full range of available data—the proprietary data from clinical studies or the data held by each individual applicant holder.” The FDA is the only entity with all of the data needed to recommend a safety information change.⁹

The GPhA is not the only concerned entity. In a recent survey released in collaboration with the GPhA, it was found that physicians, physician assistants, and pharmacists are also wary that the Proposed Rule would cause patient confusion and could impact their willingness to prescribe generic drugs.¹⁰

GPhA Launches Biosimilars Council

Why is the Biosimilars Council an important addition to the GPhA? What would you want the community to know?

As Craig Wheeler, GPhA board chairman and president and CEO of Momenta Pharmaceuticals said in a recent press release, “The Biosimilars Council is the culmination of the Association’s longstanding and unwavering commitment to patient access to safe, affordable, and lifesaving biosimilar medicines. The GPhA Biosimilars Council is designed to meet the unique needs of healthcare companies as they navigate this emerging space.”¹¹

The Biosimilars Council works to ensure a positive regulatory, reimbursement, political, and policy environment for patient access to biosimilar medications, and will educate the public and patients about the safety and effectiveness of these agents. Areas of focus will include education, access, the nascent regulatory environment, reimbursement, and legal affairs. Additional information is available at www.biosimilarscouncil.org.¹¹

It is important that as the U.S. regulatory framework for these medicines takes shape, policies are put in place that promotes patient access and pharmaceutical competition.

REFERENCES

1. GPhA press release. GPhA to Congress: embrace five opportunities for more generic drug savings. February 1, 2016. www.gphaonline.org/gpha-media/press/gpha-to-congress-embrace-five-opportunities-for-more-generic-drug-savings. Accessed March 5, 2016.
2. GPhA press release. Generic Pharmaceutical Association selects Chester “Chip” Davis, Jr, as president and CEO. www.gphaonline.org/gpha-media/press/generic-pharmaceutical-association-selects-chester. Accessed May 2, 2016.
3. GPhA. The Association. www.gphaonline.org/about/the-gpha-association. Accessed March 5, 2016.
4. GPhA press release. Statement by Ralph G. Neas, president and CEO, GPhA, regarding the FAST Generics Act. June 18, 2015. www.gphaonline.org/gpha-media/press/statement-by-ralph-g-neas-president-and-ceo-gpha-regarding-the-fast-generics-act. Accessed March 5, 2016.
5. GPhA press release. Statement by Chip Davis, president and CEO, GPhA, regarding REMS misuse. October 6, 2015. www.gphaonline.org/gpha-media/press/statement-by-ralph-g-neas-president-and-ceo-gpha-regarding-the-fast-generics-act/. Accessed March 5, 2016.
6. GPhA press release. Steve Arnoff, healthcare stakeholders urge Senate to end REMS abuse. June 18, 2015. www.gphaonline.org/gpha-media/press/healthcare-stakeholders-urge-senate-to-end-rems-abuse-increase-generic-drug-competition. Accessed March 5, 2016.
7. GPhA press release. Statement by Ralph G. Neas, president and CEO, GPhA, on the June 15th FDA public meeting on GDUFA. June 15, 2015. www.gphaonline.org/gpha-media/press/statement-by-ralph-g-neas-president-and-ceo-gpha-on-the-june-15th-fda-public-meeting-on-gdufa. Accessed March 5, 2016.
8. GPhA press release. Statement by Ralph G. Neas, president and CEO, GPhA, regarding the FDA public meeting on generic drug labeling. March 27, 2015. www.gphaonline.org/gpha-media/press/statement-by-ralph-g-neas-president-and-ceo-gpha-regarding-the-fda-public-meeting-on-generic-drug-labeling. Accessed March 5, 2016.
9. GPhA press release. Statement by Chip Davis, president and CEO, GPhA, regarding the FDA proposed rule on generic drug labels. December 3, 2015. www.gphaonline.org/gpha-media/press/statement-by-chip-davis-president-and-ceo-gpha-regarding-the-fda-proposed-rule-on-generic-drug-labels. Accessed March 5, 2016.
10. GPhA press release. GPhA/PhRMA press alternative to FDA proposed rule on generic drug labeling. April 27, 2015. www.gphaonline.org/gpha-media/press/gpha-phrma-press-alternative-to-fda-proposed-rule-on-generic-drug-labeling. Accessed March 5, 2016.
11. GPhA press release. GPhA launches Biosimilars Council, new industry group will educate and advocate for patient access to safe, affordable lifesaving medicines. April 16, 2015. www.gphaonline.org/gpha-media/press/gpha-launches-biosimilars-council-new-industry-group-will-educate-and-advocate-for-patient-access-to-safe-affordable-lifesaving-medicines. Accessed March 5, 2016.

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