Using a mixture of data, officials from the U.S. Food and Drug Administration estimated Americans could save up to $16 billion over one year from the generic drugs approved by the agency in 2017.
As of March 1, Americans had saved as much as $11.8 billion from those lower-cost versions of brand-name medicines approved in 2017, with $8.8 billion of those savings occurring last year, the officials estimated.
The report comes as President Donald Trump and officials from his administration, including Health and Human Services Secretary Alex Azar and FDA Commissioner Scott Gottlieb, have been promoting their strategic plan to lower drug prices, unveiled May 11.
Trump said May 30 that he had received a commitment from some of the nation's largest drugmakers to voluntarily reduce the prices of their medicines. He said the administration plans to give more details in mid-June.
The White House, Health and Human Services, Centers for Medicare and Medicaid Services and FDA have all declined to respond to questions about which companies had agreed to lower their prices or any other details. No biopharmaceutical companies have come forward to say they are among the manufacturers for which Trump was referencing and industry groups have remained mum on the matter.
Azar is set to testify June 12 at the Senate Health, Education, Labor and Pensions Committee about the administration's drug prices blueprint.
Generics critical to savings
The FDA officials noted that since its inception in 1984, the generic drug approval pathway has played a critical role in increasing Americans' access to lower-cost medicines.
In 2017, the FDA approved more generic drugs than in any other year — granting full approvals to 843 copycat medicines and tentatively clearing another 184, for a record total of 1,027.
For their analysis, officials from the FDA's Office of the Commissioner, Office of Generic Drugs and the Office of Program and Strategic Analysis used several public, nonpublic and private data sources, including the agency's Drug Products with Therapeutic Equivalence Evaluations — commonly known as the "Orange Book" — its Electronic Drug Registration and Listing System; its Document Archiving, Reporting and Regulatory Tracking System; IQVIA National Sales Perspectives; and the Bureau of Labor Statistics Consumer Price Index.
Caveats
The regulators noted several caveats to their analysis, including that the sales data represented the pharmacy acquisition cost of the medicines and did not reflect any rebates, discounts or off-invoice adjustments.
In addition, they measured cost savings for each market after the date of FDA approval and not the actual marketing start date, which could have been weeks, if not months, after the generic medicines were cleared for the U.S. market.
The FDA officials also only examined markets with generics fully approved in 2017 and not those with the tentative approvals — medicines that faced delays before gaining the agency's full blessing because of patent or exclusivity issues.
Thwarting gaming tactics
In recent weeks, Gottlieb has been taking actions aimed at thwarting the gaming tactics used by brand-name drugmakers to stifle generic competition — making good on threats that he had made over a series of months, in which he warned innovators to "end the shenanigans" and "stop the shell games" in trying to hang on to their monopolies.
On May 31, the FDA revealed that it was making it easier for generic drug manufacturers to create their own risk programs. The agency issued new guidelines spelling out how and when generics makers can seek waivers from the agency that would allow those companies to develop their own risk evaluation and mitigation strategy, or REMS, plans, which are required programs to ensure that a medicine's benefits outweigh its risks.
The FDA requires REMS when a drug is associated with serious risks. But Gottlieb said the agency was aware of situations where innovators exploit those programs to subvert competition from their generic rivals.
In another action aimed at deterring innovator drugmakers from gaming the REMS system, the FDA on May 17 unveiled a new website that identified brand-name companies that have tried to use the programs to prevent generics makers from obtaining the samples they need to conduct bioequivalent studies for U.S. approval.
Gottlieb said he was not trying to shame those innovators by naming them the website but was trying to discourage them from engaging in those tactics.
