FDA Commissioner Announces Drug Competition Action Plan to Help Lower Drug Prices

FDA Commissioner Scott Gottlieb, MD, has unveiled a new plan to facilitate increased competition in the prescription drug market through approval of more lower-cost, generic medications. Too many patients are being priced out of medicines they need, Gottlieb noted, and though the agency can’t directly involve itself in drug pricing, “we can take steps to help address this problem by facilitating increased competition in the market for prescription drugs through the approval of lower-cost, generic medicines.”

Generic drugs have saved the US health system $1.67 trillion in the last 10 years, Gottlieb said. “We could see even greater cost savings if we helped more safe and effective generic drugs get to market sooner, after patent and statutory exclusivity periods have lapsed, by addressing some of the scientific and regulatory obstacles to generic competition across the full range of FDA-approved drugs.” Alluding to barriers that may delay and even deny patient access to more affordable drugs, Gottlieb wrote that a public meeting on July 18, 2017, will solicit input on instances in which the FDA’s rules—including standards and procedures related to generic drug approvals—are being used in ways that may create obstacles to generic access rather than “ensuring the vigorous competition Congress intended.”

Gottlieb argued that while innovation in pharmaceutical development provides the seed for developing new and life-saving drugs, access to lower-cost alternatives once patents expire is also critical to the nation’s health. The FDA has an important responsibility to enforce the laws in a manner that adheres to the balance struck by Congress, he stated.

“We know that sometimes our regulatory rules might be ‘gamed’ in ways that may delay generic drug approvals beyond the time frame the law intended,” the Commissioner noted, to reduce competition. The Drug Competition Action Plan will actively address the way these rules are being used and possibly misused. Examples of gaming include the increasing unavailability of some branded products for comparative testing, he said, explaining that in order to do needed studies to develop generic alternatives to branded drugs, 1500 to 3000 doses of originator drug samples are needed. Although generic makers are willing to buy these products at fair market value, brand companies may use regulatory strategies or commercial techniques to purposely block generic companies from getting these testing samples.

Gottlieb discussed other problems accessing testing samples, such as when brand products are subjected to limited distribution. That can be because a company has voluntarily adopted limitations on distribution or the limitations are imposed as part of an FDA-mandated Risk Evaluation and Mitigation Strategy (REMS) program placed on some drugs to ensure safe use. In some cases, branded sponsors are reported to be using the limited distribution under the REMS program to block generic firms from getting test samples—whether or not the supply limitations are actually REMS related.

The FDA is also going to be examining policy and programmatic changes to address the issues thwarting generic competition. Some may be actions the FDA can take by using their own authorities more forcefully, while other steps might involve collaboration with sister agencies.

The Action Plan unveiled by the FDA Commissioner will grow and be updated as initial elements are implemented. The agency intends to broaden access to safe and effective generic drugs that can improve access to medicines and help consumers lower healthcare costs, but will steadfastly maintain FDA’s gold standard for rigorous, science-based regulation, Gottlieb promised.

Even though the actions promised by Gottlieb don’t affect branded drug spending until much later in the drug’s lifespan, his plan could be a setback to companies such as Turing Pharmaceuticals and Valeant Pharmaceuticals that specialize in buying up older, off-patent drugs and dramatically raising the prices once they become de facto monopolies. Targeting such “gaming” of the system would be an initial step in the FDA’s efforts to address generic drug markets, Gottlieb implied, and could later involve the Federal Trade Commission.