Affordable Medicine

Generic drugs are an essential element of the pharmaceutical ecosystem. The low-cost, off-patent medicines keep overall health care expenses low. And they exert the kind of pressure that keeps the big drug companies busy in the laboratory, ideally generating new rafts of breakthrough drugs that will hit the market as current big money-makers come off patent.

With $100 billion worth of branded drugs due to lose patent exclusivity in the next five years, however, applications for new generics are mounting at the Food & Drug Administration. Currently, about 800 generic drug applications are awaiting decisions at FDA's Office of Generic Drugs (OGD), the unit responsible for reviewing and approving new generic medicines. And even though the office's workload increased by 36% in 2005 from 2004, according to the Generic Pharmaceutical Association (GPhA), OGD's funding remains flat in the Bush Administration's budget for fiscal 2007. That makes 2007 the third year in a row without a budgeted increase in spending for the unit.

According to Kathleen Jaeger, chief executive officer of GPhA, even a minimum boost in OGD's budget would provide significant return on investment and long-term benefit to patients and government health care programs. "A modest investment in OGD−such as $15 million−would help to make more affordable medicines available to consumers and public and private health care purchasers, who would save billions of dollars," she says. "Those savings also would enable the Administration to reach more Americans through its priority health care initiatives, such as Medicare, Medicaid, and programs to improve children's health care, assist the chronically ill, and fight AIDS."

Andrea Hofelich, GPhA's director of media relations, adds, "Nationwide, if we were to increase generic utilization by 1%, we would save $4 billion annually."

FDA claims that OGD has doubled in size since 2001, that it has added 12 staff members last year and plans to add more this year, and that it has initiated significant process improvements. "In spite of the amount of applications received, OGD has continued to increase the number of approvals and reduce the overall time to approval, with the median time to approval in 2005 of 16.4 months, down from 23 months in 1996," an FDA representative says.

Among its efficiency improvement efforts, OGD is now reviewing applications submitted at the end of the five-year period of new chemical entity exclusivity in "clusters" to increase efficiency and decrease review time. FDA points to the approval of zonisamide, an epilepsy-related seizure therapy, as an example of the effectiveness of the cluster-review method. OGD received more than a dozen Abbreviated New Drug Applications for the product, and a review team approved 10 first-time generics applications in about nine months.

FDA is also promoting electronically formatted applications as a means of accelerating the approval process and is implementing a new review format for applications called Question-Based Review, a risk assessment mechanism designed to determine the level of staff needed.

And the government has floated the idea of initiating user fees, comparable with fees paid by drug companies, to expedite review of new drugs.

GPhA says it would prefer the government to turn its attention to reducing "legal and regulatory loopholes" currently pervading the intellectual property reviews on generic drug applications, given that many of its members are so small that they can't afford user fees. Nevertheless, "the generic pharmaceutical industry would consider paying user fees if FDA and the Bush Administration would guarantee legislative and other changes that the industry believes would speed its products to market," Jaeger says.

Jaeger adds that GPhA recognizes efforts under way to streamline the approval process at OGD. "However, it is deeply disappointing that this year's lack of investment in OGD undermines the very goal that the Bush Administration rightly extols," she says, referring to the Administration's assertion that generic drugs are a key to cost control. Jaeger contends that Congress needs to take steps to provide additional funding.