Makers of copycat drugs will face pressure to bring down prices even more quickly as the U.S. Food and Drug Administration pushes to get more low-cost competition to market.
The FDA wants to prioritize certain generic-drug applications in an effort to drive down prices, which have drawn increasing scrutiny from lawmakers and the ire of President Donald Trump. The agency has its sights set on an incentive granted to drugmakers that are first to seek approval for a copy of a brand-name drug, according to a policy document released Thursday.
Generic-drug makers must submit their medicines to the FDA for approval. So-called first filers are typically able to sell their version of a brand-name drug free from competition from other generics for 180 days. When that period is up, the floodgates open -- though a backlog of applications awaiting FDA clearance has meant some first filers have had the market to themselves for far longer.
The new FDA initiative is meant to clear that backlog, speeding competition and the subsequent price drops, said FDA Commissioner Scott Gottlieb.
“Soon after the 180-day exclusivity period lapses, consumers can have the benefit of brisk competition from multiple other generic entrants. This can improve affordability and access to important drugs,” Gottlieb said in a statement.
Gottlieb pledged in June to clear the logjam in a year. The FDA also now plans to move some applications to the front of the line to ensure approvals can be granted as soon as a first filer’s window closes, according to the policy document.
The generic drug industry has gone through a period of turbulence. Major manufacturers such as Mylan NV and Teva Pharmaceutical Industries Ltd. have blamed falling prices for hits to their revenue. Almost 20 companies are also the target of civil probe by U.S. states, and have been accused of fixing prices and improperly carving up markets.
The price of a medication tends to drop with each copy that comes to market. While prices don’t decline much after a branded drug gets a single generic competitor, the arrival of a second knocks the price down 52 percent, on average, according to the FDA. Prices fall to 20 percent of the original price once nine generics are on the market, according to the agency.
Gottlieb has said the FDA will prioritize clearing new versions of drugs with fewer than three generic options. The agency has also posted a list of brand-name drugs that no longer are protected from competition but haven’t seen a generic enter the market.
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