Generic drugs provide Americans with lower-cost alternatives to the escalating costs of brand name drugs. An abbreviated new drug application (ANDA) contains data that when submitted to the FDA's Office of Generic Drugs (OGD) facilitates the review and ultimate approval of a safe and effective innovator-equivalent drug. The Drug Price Competition and Patent Term Restoration Act of 1984 established using bioequivalence as the basis for approving generic copies of innovator drugs. This act expedites the availability of less costly generics by permitting the FDA to approve ANDAs without conducting costly and duplicative clinical trials. Once approved, OGD assures the generic drug will perform the same as its respective innovator drug. However, generics may differ in such characteristics as shape, scoring configuration, release mechanisms, packaging, excipients, expiration date/time, and minor aspects of labeling and storage conditions. With the exception of language protected by patents or exclusivity, the labeling of the generic, including directions for use, must be virtually the same as that of the brand name product. Both brand name and generic drug manufacturing facilities have to adopt the same standards of good manufacturing practices and meet the FDA's specifications.

All approved drugs, both innovator and generic, are listed in the FDA's Approved Drug Products with Therapeutic Equivalence Evaluations (Orange Book). The only difference between a full approval and a tentative approval is that the final approval of an application is delayed due to an existing patent or exclusivity on the innovator drug. The tentative approval becomes a full approval through a subsequent action letter to the application holder.

In recent years, the OGD has approved increasing numbers of ANDAs and is continuing to decrease the time to approval for these applications. The use of generics has resulted in substantial savings to consumers and the U.S. government (through Medicare, Medicaid, and other government health care programs). According to the Congressional Budget Office, consumers save up to $10 billion a year compared with the price of innovator drugs. The FDA has approved about 7,000 generic drugs for various treatments. Today, almost half of all prescriptions are filled with generic drugs.

Following approval, both generic and brand name companies must submit data to the FDA showing that their products continue to meet the agency's specifications until the established expiration date. The FDA regularly assesses the quality of generics on the market and thoroughly evaluates reports about their performance. An FDA review found that the average difference between the bioequivalence of more than 270 approved generic drugs and their innovator counterparts was 3.5%. This estimate is about the same as the difference found between batches of brand name products.

The total number of approved generics has increased from 305 in 2001 to 537 in 2006--a 76% increase over six years with an annual average of 406 approvals. The number of ANDAs approved for first-time generics ranged from 61 to 158--a 159% increase over six years with an average of 93 ANDAs approved per year. Tentative approvals ranged from 67 to 166, a 147% rise. The average number of ANDAs approved tentatively per year was 104. ANDAs approved for "not first-time" generics ranked the highest in number of approvals. They averaged at 209 over six years and ranged from 159 to 271 approvals per year. Thus, the "me-too" versions of already marketed generics are on the rise, perhaps because the number of innovator drugs coming off patent is decreasing.

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