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| FDA           Consumer magazineSeptember-October 2003           Issue          Pub No. FDA 04-1328C | This article originally           appeared in the September-October 2003 FDA Consumer and contains revisions           made in October 2003 and May 2004. |
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# Greater Access to Generic DrugsNew FDA initiatives to improve drug reviews and reduce legal   loopholes

*By Michelle Meadows*

You might think that lower cost means lower quality, but that's not the case   with prescription drugs, says Gary Buehler, R.Ph., director of the Food and   Drug Administration's Office of Generic Drugs. "The FDA ensures a rigorous   review of all drugs, and consumers can be assured that generic drugs are as   safe and effective as brand-name drug products," he says. 

Generic drugs are copies of brand-name drugs and are available in both over-the-counter   (OTC) and prescription form. For example, ibuprofen is the generic version of   the OTC pain medicine Advil. Last year, the FDA approved the first generic of   the prescription anti-seizure drug Neurontin (gabapentin). Generics have the   same quality, safety, and strength as branded medicines. But for an average   brand-name drug that costs $72, the generic version costs about $17. 

At roughly one-third the price of brand-name medications, generics can bring   consumers significant savings. A 2002 study by the Schneider Institute for Health   Policy at Brandeis University in Waltham, Mass., concluded that if Medicare   increased the rate of generic usage to that of similar high-performing private   sector plans, its 40 million beneficiaries could see potential savings of $14   billion in 2003. 

The FDA has made it a priority to encourage the availability of generic drugs.   FDA experts say there is no question that brand-name drugs are also essential. 

"Generic drugs are possible only as a result of the development of new   innovative drugs, and this innovation requires significant investment,"   says former FDA Commissioner Mark B. McClellan, M.D., Ph.D. "Without fair   compensation from meaningful patent protection, drug research and development   would slow or stop." According to the Boston-based Tufts Center for the   Study of Drug Development, the cost to develop a new drug averages $897 million.   The Pharmaceutical Research and Manufacturers of America (PhRMA) reports that   its member companies invested about $32 billion in 2002 in discovering and developing   new medicines.

A brand-name company submits information to the FDA on patents it holds on   a drug and their expiration dates. Then the agency lists patents on new drugs   in the publication *Approved Drug Products with Therapeutic Equivalence,*   also known as the Orange Book. Patent protection gives brand-name companies,   also known as "innovator" companies, the sole right to sell a drug   for a certain period of time. This allows them to fairly recoup their investment   costs. Patent protection for drugs typically lasts an average of 11 years. A   generic drug can only enter the market after the brand-name patent or other   marketing exclusivities have expired and FDA approval is granted.

But rising drug costs remain a major challenge for consumers, especially older   Americans. "This is where generics play an essential role," McClellan   says. "Once the appropriate patent protection has expired, generic medicines   give patients an alternative."

On Dec. 8, 2003, the Medicare Prescription Drug Improvement and Modernization   Act of 2003 was enacted. Title XI of that Act provides for, among other things,   limits on certain court actions that could delay availability of generic drugs.   The move is expected to save consumers billions of dollars, as well as lower   costs for government and employer-provided coverage.

In addition, the FDA also continues initiatives to improve access to generic   drugs. These initiatives involve revamping the FDA's review process to put generic   drugs into consumers' hands more quickly. The fiscal year 2005 FDA budget request   includes increases in funding for the FDA's generic drug program. The additional   funds would go toward increased staff and other improvements to speed up generic   drug reviews. The FDA routinely evaluates the generic drug review program to   find ways to increase efficiency and get quality products into the hands of   consumers to improve the public health. 

### How Generics Get on the Market

The main reason generic drug companies can market their drugs at lower prices   is that they don't face the same development costs as brand-name companies.   Under the Drug Price Competition and Patent Term Restoration Act of 1984, also   known as the Hatch-Waxman Act, generic drug companies don't have to repeat expensive   clinical trials.

"The Hatch-Waxman Act essentially created the generic drug industry,"   says Buehler. Roughly two decades ago, generics made up only 12 percent of all   prescriptions. Now, generics represent over 50 percent of all prescriptions   in the United States, according to the Generic Pharmaceutical Association (GPhA).   "The law paved the way for many more generic drugs because rather than   repeating research, generic drug companies instead must show the FDA that their   drugs are bioequivalent to the brand-name drug," Buehler says.

When a drug is "bioequivalent" to another, it means that its active   ingredient works in the same way and in the same amount of time as the brand-name   drug. Scientists measure a generic drug's bioavailability--the amount of the   generic drug in the bloodstream and how long it takes to get there. Then they   compare that measurement to the brand-name drug. While innovator companies submit   full new drug applications, generic companies submit what are known as abbreviated   new drug applications (ANDAs). Along with showing that a generic drug has the   same bioavailability as the brand-name drug, generic companies must prove that   their products have the same active ingredient, follow the same quality manufacturing   standards, and have similar labeling. (See "FDA Requirements for Generic Drugs.")

The competition encouraged by the Hatch-Waxman Act helps to keep drug costs   down and also spurs innovator firms to develop more new drugs, Buehler says.   "The law aims to protect the intellectual property rights of innovator   companies, while also encouraging the development of generic drugs," he   says. As an incentive for generic drug firms to submit ANDAs to the FDA, the   first generic challenger of patents is awarded a period of marketing exclusivity. 

### Reducing Legal Barriers

The Medicare Modernization Act will close legal loopholes in the Hatch-Waxman   Act that delay generic drug approval. For example, only one 30-month "stay"   is allowed under the Act if an innovator company sues a generic company over   patent issues. This may occur after a generic applicant certifies that an innovator's   patent will not be infringed. Unless the innovator sues within 45 days after   such notice, there is no 30-month stay. The innovator can still sue, but no   30-month stay results.

A stay is the term for the delay in generic approval that occurs when a brand-name   company files a patent infringement lawsuit. This delay is meant to be a time   to resolve issues about whether a generic drug company is infringing a drug   patent. During the stay the FDA cannot approve the generic drug.

A limit of one 30-month stay is in line with recommendations from the Federal   Trade Commission (FTC). According to an FTC study released July 30, 2002, there   were cases involving several brand-name drugs between 1994 and 2000 in which   repeated 30-month stays delayed access to generic drugs.

Access to generic drugs has sometimes been delayed from four to 44 months when   drug companies have used various methods to get repeated 30-month stays. Examples   of delaying tactics include submitting patent information on the color of the   pill bottle, ingredient combinations, and other minor matters that don't affect   the drug's effectiveness or safety.

Such strategies have been seen only in a minority of drug firms. And, according   to PhRMA, stays are rare. But the FTC concluded that multiple stays can have   substantial financial impact and are "harmful to consumers." President   Bush has said, "Our message to brand-name manufacturers is clear: You deserve   the fair rewards of your research and development; you do not have the right   to keep generic drugs off the market for frivolous reasons."

A new regulation that went into effect Aug. 18, 2003, implements another FTC   recommendation, to tighten the patent submission and listing process so that   only appropriate patents are submitted to the FDA. To help prevent unfair competition,   the regulation clarifies the types of patents that must be submitted to the   FDA. Companies must submit patent information on active ingredients, drug formulations   and compositions, and approved uses of a drug. Certain patents, such as those   for packaging claims, are among those that cannot be submitted. More detailed   information will now be required on patent submissions, and false statements   could lead to criminal charges.

Kathleen Jaeger, GPhA president and chief executive officer, praised the announcement   of the generic drug regulation and said it complements generic drug access provisions   of the Medicare Modernization Act. 

"GPhA strongly believes that the administration's initiatives, coupled   with substantial legislative measures in the compromise legislation, will ensure   that American health care becomes more affordable," Jaeger said in a statement.   The legislation overlaps with the FDA's regulation in one area in that it would   also prevent multiple 30-month stays in the approval of generic drugs.

In testimony before the Senate Judiciary Committee on June 17, 2003, Bruce   N. Kuhlik, PhRMA's senior vice president and general counsel, cautioned against   changes that could "undermine incentives for continued pharmaceutical innovation."   He said, "The Hatch-Waxman Act of 1984 is achieving its purpose of speeding   market entry of generic drugs."

Kuhlik pointed out that since the law was enacted, the generic share of the   drug market has soared, and so has the expense of developing new drugs. "Our   patent laws and regulations provide a key incentive for continued innovation   in medicines," Kuhlik said. "Better treatments and new cures can come   only from pharmaceutical research companies, and only if patent incentives are   maintained." 

### More Efficient Reviews

In   2003, the FDA approved 263 generic drugs. The agency also issued 101 tentative   approvals of generic drugs. A tentative approval indicates that final approval   of the application is delayed due to patent or exclusivity issues. In 2003,   479 applications were submitted for review. This is up from 392 the year before.

It takes 20 months on average for a new generic drug to be approved by the   FDA, and it usually involves multiple review cycles. Very few applications are   approved on the first cycle, but about a third are approved on the second cycle.   Sometimes multiple review cycles can't be avoided, but the FDA has identified   the lack of early communication between generic drug companies and the FDA as   one cause for multiple review cycles. With the proposed increases for the generics   budget, the FDA plans to increase resources that would make earlier communications   possible.

The agency plans to hire more review experts to help speed up the review of   generic drug applications so that review time can be reduced by at least two   months. The goal is to provide guidance to industry to allow for submission   of more complete of applications the first time they are submitted, rather than   going through multiple review cycles because of problems. Each round of review   generally means many months delay in approval.

The new resources, along with other improvements, such as adding another chemistry   review division, are expected to reduce the total time to approval for most   new generic drugs by three months or more over the next three to five years.   One new approach will be to develop an FDA standard for giving generic companies   initial feedback on obvious minor deficiencies within 10 days after the first   review cycle is completed. Applicants will have an opportunity to respond and   amend an application to try to avoid a whole new review cycle. 

### Getting the Word Out

"Generic Drugs: Safe. Effective. FDA Approved." That's one of the   slogans featured in an FDA consumer education program to promote consumer confidence   in generic drugs. The FDA messages have been featured in newspaper articles,   posters, and brochures highlighting the safety and effectiveness of generic   drugs. Public service announcements have appeared in major magazines and journals,   as well as on the radio. Posters and brochures are being distributed at major   pharmacies throughout the country. Advertisements rolled around on buses in   Chicago, Los Angeles, and New York, and have appeared on billboards in Michigan.

Consumers want lower-cost options for drugs, according to AARP, a nonprofit   organization that addresses the needs of people ages 50 and older. In a recent   AARP survey of 1,046 people ages 45 and up, 84 percent said generic drugs are   important for controlling drug costs. Most also said they usually choose generics   over brand names when generics are available. And 24 percent reported not being   able to afford a prescription drug when no generic was available.

Richard Cole, senior vice president of corporate communications at Blue Cross   Blue Shield of Michigan, says in a statewide survey he conducted in the summer   of 2001, most people said they believe generic drugs are equivalent to brand-name   drugs. "In the past, the conventional wisdom was that if we increased education   about generic drugs, it would look like our only motives were to save money   for the company," Cole says. "But consumers reported that they saw   it as our job to tell them about generic drug options."

In the fall of 2001, Blue Cross Blue Shield invited all Michigan pharmacies   to participate in a competition to increase generic dispensing rates. The goal   was to increase generic use among Michigan Blues members by one percentage point,   which would result in a $17 million savings for both the company and the customers,   Cole says.

Blue Cross Blue Shield challenged pharmacies to develop in-store campaigns   and tracked generic dispensing rates. More than 1,000 Michigan pharmacies competed.   The prize for the stores with the highest rates: featured spots in a $1 million   advertising campaign with the slogan "Generic Drugs--The Unadvertised Brand."   Rite Aid won for the retail chain category and Grand Value Drugs of Detroit   won for the independent pharmacy category. Cole estimates that the annual savings   for Michigan Blues members was more than $30 million.

"People don't want a less expensive drug if they think the quality isn't   good," Cole says. "When you or a member of your family gets sick,   you don't want second best. But you don't have to worry about that with generic   drugs."

The FDA's Center for Drug Evaluation and Research would like to hear from organizations   interested in partnering with the FDA on its generic drug education program.   For more information about a potential partnership, call (301) 827-7503.

## For More Information 

FDA's Office of Generic Drugs

Generic drugs final rule

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## FDA Requirements for Generic Drugs

- Generic drugs must have the same active ingredients and the same labeled     strength as the brand-name product.
- Generic drugs must have the same dosage form (for example, tablets, liquids)     and must be administered in the same way.
- Generic drug manufacturers must show that a generic drug is bioequivalent     to the brand-name drug, which means the generic version delivers the same     amount of active ingredients into a patient's bloodstream in the same amount     of time as the brand-name drug.
- Generic drug labeling must be essentially the same as the labeling of the     brand-name drug.
- Generic drug manufacturers must fully document the generic drug's chemistry,     manufacturing steps, and quality control measures.
- Firms must assure the FDA that the raw materials and finished product meet     specifications of the U.S. Pharmacopoeia, the organization that sets standards     for drug purity in the United States.
- Firms must show that a generic drug will remain potent and unchanged until     the expiration date on the label before it can be sold.
- Firms must comply with federal regulations for good manufacturing practices     and provide the FDA a full description of facilities they use to manufacture,     process, test, package, and label the drug. The FDA inspects manufacturing     facilities to ensure compliance.

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## Approvals for 2003 

Examples of recent first-time generic equivalent approvals for brand-name     drugs:

- paroxetine (Paxil) for depression
- gabapentin (Neurontin) for certain kinds of seizures
- mirtazapine (Remeron) for depression
- quinapril (Accupril) for high blood pressure

*(Infographic by Renée Gordon)*

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