Increased U.S. Generic Drug Approvals Fail to Boost Competition and Reduce Costs

The number of U.S. Food and Drug Administration (FDA) approvals of generic drugs for cancer, heart disease, and other conditions have soared. However, expectations that this surge of approvals would increase competition and therefore reduce high drug costs were not met, as many of the lower-priced generic medications never hit the market.

Researchers and pharmaceutical industry officials claim that delays in releasing generic drugs to the marketplace usually stem from legal issues (such as brand-name manufacturers defending their products by filing lawsuits and pursuing additional patents) and changing business strategies. Generic drugs can be less profitable, companies require plants that are ready to produce the drugs, and mergers between drug makers have cut down on the number of companies willing to sell generic drugs.

The pace of FDA approvals picked up in 2017 in response to public outrage over high drug prices. Health data firm IQVIA found that 2,492 generic versions of 617 brand-name drugs were FDA approved since 2016. Less than two-thirds of those have entered the market. Last year, about 40% of the 689 total generic drug approvals were never launched.

“It’s very troublesome,” said Ameet Sarpatwari, JD, PhD, an instructor at Harvard Medical School. “Prompt generic entry is the one known solution to lowering drug prices.”

Source: The Wall Street Journal, November 19, 2019.