Towards Greater Access to Generics and Biosimilars

Will FDA Commissioner Scott Gottlieb succeed in increasing access to generic drugs and biosimilars? In a speech last month he stated that with increased competition, patients will have greater access to affordable medication.

Gottlieb highlighted the successes in increasing access to generic prescription drugs. In 2017, the FDA approved 1,027 new generic drugs, compared to 813 the previous year, and 46 novel drugs, the highest in 21 years.

Many of the approved novel drugs will treat rare diseases and sub-types of cancer. Sixty-one percent of these drugs were approved using one or more of the FDA’s expedited development and review programs. These are programs that shorten the time frame for drug approvals, if they demonstrate the potential to address a current unmet medical need or advance medical care in a significant way. Drugs that meet the latter designation fall under “Priority Review,” where a drug is reviewed within six months versus the standard ten. Twenty-eight of the novel drugs approved in 2017 went through this program.

Generic drugs and biosimilars-- alternative versions of biologics, which are medications made from microorganisms found in animal or plant cells—are both versions of their reference drug. However, biosimilars are not generic versions of biologics. Biosimilars have more complex molecular structures, cost more than generics to manufacture, and unlike generic drugs, are not exact copies of their reference drugs. Still, since biologics have the potential to prevent, treat, or cure diseases, the availability of a lower priced alternative in the form of biosimilars-makes them invaluable.

However, getting biosimilars to enter the market is not easy. Nine biosimilars have been approved by the FDA. Five of them were approved in 2017, three in 2016, and one in 2015. Yet, only three have made it to the market.

Two challenges exist in getting generic drugs and biosimilars to market.

First, FDA has not provided final guidance on how drug manufactures can produce interchangeable biosimilars that meet the standard created under the Biologics Price Competition and Innovation Act (BCPIA) of 2010. Under BCPIA, to be considered an interchangeable biologic product, the biosimilar must produce the same clinical results as the reference biologic drug in any patient, even if patients switch to biosimilars in the middle of their treatment programs. Gottlieb hopes to address this.

FDA needs to continue to streamline the approval process. In the biologics market, final guidance on interchangeable biosimilars needs to be made sooner rather than later.

Second, in the generic drug market, there is a practice among brand name drug manufacturers to settle patent litigations with generic drug manufacturers by paying them to stay out of the market for a period of time, also known as “pay for delay.”  Such agreements are anticompetitive because they deny patients access to affordable drug options.

Competition is not possible without removing market barriers. In the case of alternative drugs, a more streamlined regulatory process is required. Lower prices cannot be achieved if there are only a few brand drugs dominating the market. There is always an incentive for companies to raise prices, if there is high demand for their products. The FDA can prevent market dominance and increase competition by continuing the speedy approval of generic drugs and biosimilars it began last year.

Isai Chavez is a contributor to Economics 21.

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