INNsight article by Alan Klein, March 2014

At the annual meeting of the Generic Pharmaceutical Association (GPhA) in Florida on February 18-21, top generic drug companies met to discuss challenges facing the industry as well as the success of the Hatch-Waxman legislation on its 30th anniversary. Acknowledging and celebrating the widespread acceptance today of generic pharmaceuticals by U.S. patients and patients worldwide,  industry leaders also discussed financial challenges faced by manufacturers from increased costs and pricing pressures, a trend towards the consolidation of suppliers and distributors, and efforts by governmental and health care insurers to reduce the patient cost of and increase access to generic medicines. On the legislative front, aggressive lobbying by brand name pharmaceutical companies to discourage the use of generic biosimilars or to make their use more difficult by laws conditioning a pharmacist’s dispensing of such medicines upon physician notification and approval was likewise the subject of concern.

The  meeting’s keynote speaker, head of the newly reconstituted Office of Generic Drugs at the Food and Drug Administration (FDA), provided the GPhA membership with a status report on the implementation of the Generic Drug User Fee Act (GDUFA), highlighting both achievements and the agency’s future goals. Chief executives of some of the leading generics weighed in against proposed labeling regulations by the FDA, which they said would  lead to varying labels for the same drug and jeopardize the “sameness” requirement of Hatch-Waxman  that a generic drug’s labeling always be the same as its brand drug equivalent. They also urged more attention by the FDA in achieving parity in foreign plant inspections, modifications in the agency’s REMS regulations to permit generics to obtain brand drugs for bioequivalency tests, greater responsiveness and clarity by the agency in communicating with manufacturers, and a clearer pathway for the development and approval of biosimilars.

GDUFA Progress Report After One Year

Dr. Kathleen Uhl, Acting Director of the Office of Generic Drugs (ODG), was this year’s keynote speaker at the GPhA meeting.  For the past four years, the keynote address at GPhA had been given by FDA Commissioner Margaret Hamburg, who was concluding a visit to India for meetings with food and drug regulators and top company executives to reinforce the FDA’s regulatory requirements and exchange views on product quality and compliance with the FDA’s manufacturing and testing standards.

Characterizing GDUFA as a “game changer,” Dr. Uhl detailed what she described as a “massive transformation” within her agency to achieve the specific goals established for implementation of the legislation’s key objectives: Greater product safety through biennial plant inspections worldwide, transparency in the global supply chain, and the accelerated consideration and approval of ANDAs, their supplements and amendments. Utilizing approximately USD $300 million contributed yearly by generic drug and API manufacturers, the FDA, in its GDUFA Goals and Commitment Letter, posits a five-year plan to accomplish these targets. To achieve these goals, she noted, the agency needs to adopt a  proactive, timely and improved  communications process with all of its constituents, and enhanced application review procedures – a “paradigm shift,” she said – to facilitate and accelerate ANDA reviews and approvals. The FDA’s mission, Dr. Uhl said, was a ten-month turnaround for ANDAs by the end of year #5 under its GDUFA protocols.

Dr. Uhl also placed responsibility on the generic drug industry to do a more conscientious job in selecting and monitoring suppliers and contractors for compliance with FDA manufacturing and product quality requirements. She also urged the industry to change what she characterized as its “file fast, correct later” mentality by focusing up front upon the quality of all submissions to the agency. As of the date of the GPhA meeting, Dr. Uhl reported that about 45% of all pending ANDA applications had received some form of action within the first year of GDUFA through, for instance, approvals, denials, withdrawals, or requests for additional information. This has been made possible, she said, by the assignment of a Regulatory Project Manager for each application or other submission, and the revision of internal FDA policies to encourage the issuance of communications for easily correctible application deficiencies (ECDs).

Biosimilars Update

Biosimilar medicines have been available for 8 years in Europe, but their development and approval lags far behind in the U.S., conference speakers noted.  Thus far, they said,  the promise of the Biologics Price Competition and Innovation Act  remains an unsatisfied reality. Notwithstanding the FDA’s issuance of four Guidance documents – three in 2012 and another last year – the pathway for biosimilars at the FDA remains unclear. For example, whether clinical trials will be required for all biosimilars, or whether analytics coupled with prior clinical trial experience with a predicate biologic product  may suffice for FDA marketing approval, at least for certain biosimilar products, continues to be an open question at the moment. Conference attendees were unanimous in the view that substitutability and  interchangeability, the maintenance of high quality standards, and therapeutic and scientific consistency in the product, were the most important factors to ensure the profitability and acceptance of biosimilars in the marketplace among prescribers and consumers.

Top generic drug company executives stressed the need for greater clarity about the FDA pathway, especially since each biosimilar will require an investment of between USD $50 to $200 million to bring a drug to market. Managed care programs, especially, are placing pressures on generics to develop these products because of a pent up demand for less expensive, substitutable biologics. Complicating this sector of the industry and the development of biosimilars is the absence of an Orange Book equivalent for biologics, making patent intelligence and due diligence more difficult and patent challenges less predictable.

CEO Concerns and Suggestions

Generic drug customer consolidations furnish both opportunities and create profitability pressures for drug manufacturers, noted half a dozen key company CEOs in a joint interview session at the close of the GPhA meetings. As customers consolidate, bargaining leverages may shift, placing pricing demands upon manufacturers. Vertical integration, they said, may not always be the inevitable solution in maintaining profitability, which is more frequently dependent upon the content and diversity of a company’s drug portfolio. Quality maintenance and cost control, global issues, begin with the careful selection of personnel, and, in many instances, contract partners as well. Nevertheless, a generic drug company may be well advised to build into its capacity some manufacturing redundancies to preclude drug shortages should the FDA or regulatory agencies abroad commence enforcement action, including plant closures and the implementation of import bans.

Each of the executives also had helpful ideas about how the FDA could more  effectively discharge its legislative mandate. Among their suggestions was greater parity  between domestic and foreign plant inspections, the need for greater consistency in the FDA’s inspection process from plant to plant, and improved FDA communications during the ANDA  review process to permit the early correction or supplementation of applications and preserve each company’s product development time line.