August 1, 2007 in Business

FDA delays keep cheap drugs from shelves

Newhouse News Service The Spokesman-Review
 

WASHINGTON — The Food and Drug Administration, beset by a lack of funding and staffing, is failing to keep up with the growing volume of generic drug applications and meet its obligation to approve the lower-cost prescription medicines in a timely fashion.

Although the FDA gave the go-ahead to more than 500 generic drugs last year, the agency’s backlog of pending applications grew to 1,291 last month, from 780 at the end of 2005. The median approval time for new generic applications has been stalled at more than 16 months for several years, despite a statutory requirement that generic drugs be reviewed within 180 days.

Generics — which now account for more than 60 percent of all prescriptions written in the United States — are copies of expensive brand-name medicines, often selling at prices 20 percent to 80 percent lower than the originals. According to the National Association of Chain Drug Stores, the average retail price of a brand-name drug in 2006 was $111.02, while the average price of a generic was $32.23.

“The impact of the (FDA) delays is higher costs for consumers,” said William Vaughan, a senior health policy expert for Consumers Union.

Gary Buehler, director of the FDA’s Office of Generic Drugs, said his staff is “working as efficiently as it can” with the resources available to approve new generics.

“Unfortunately, we are not processing as many applications as we are getting, and that is the reason we have a backlog,” he said in an interview.

Buehler said his office will end up receiving between 800 and 900 generic drug applications this year, with little chance of getting out from under the heavy caseload.

Ira Loss, a senior pharmaceutical analyst for Washington Analysis, an investment research firm, said the Bush administration and Congress have shortchanged the FDA and consumers by not providing adequate revenue for the agency to do its job.

“The simple answer is the FDA is underfunded, and part of underfunding is in the generic drug area, where application numbers are increasing,” Loss said. “This has the effect of not reducing the drug prices as quickly as otherwise might be the case.”

When a brand-name drug patent expires, generic pharmaceutical companies seek FDA approval to market their version of the innovator’s medicine. The generic firms must show their medicines are the same as the brand-name drug in chemical composition, dosage, safety, strength, how it is taken, quality, performance and intended use.

But generic companies are spared the huge research costs borne by the innovator companies and are not required to conduct lengthy and expensive human clinical trials, allowing them to sell their copies of the drugs for much less than the brands.

Loss said the FDA has a policy of accelerating the review of generic drugs that represent the first copy of a brand medicine that is going off patent. But he said it often takes numerous generic versions of a drug on the market to really drive the price down. Under federal law, a first-time generic enjoys a six-month period of exclusive sales before competitors can enter the market.

Buehler, head of the FDA’s generics office, said that with applications for first-time generics, “we are usually ready for (them) to be approved.” In the past few months, he said, the FDA has cleared a number of first-time generics, including lower-cost copies of Toprol XL, an angina and blood-pressure drug; Ambien, a sleeping pill; Zoloft, an antidepressant; and Lamisil, a nail fungus treatment.

In 2006, U.S. brand pharmaceutical sales reached $220.6 billion, while U.S. generic sales totaled $54.1 billion, according to IMS Health. The research firm said generic medicines accounted for 63 percent of all prescriptions in the United States in 2006.

The Congressional Budget Office estimates that generic drug use results in savings for consumers of $10 billion per year, with generics viewed as one means of reducing skyrocketing health costs for individuals, employers and government programs like Medicare and Medicaid.

It is estimated that some $60 billion to $70 billion in brand-name drugs will lose their patent protections in the next few years, keeping the generic pipeline flowing and the pressure on the FDA.


Thoughts and opinions on this story? Click here to comment >>

Get stories like this in a free daily email