Generic Drug Policy In The U.s. - Impact On Drug Prices And Shortages

Generic medicines offer a significantly cheaper alternative to brand-name drugs and have become an indispensable means of maintaining patient access and adherence to treatments. In recent years, as a result of monopolistic and oligopolistic conditions, generic drugs have begun to increase in price, sometimes exorbitantly. The competitiveness of drug markets with respect to the number of generic manufacturers and the implications for drug prices and shortages have not been systematically studied. Two main analyses are presented in this study. First, using publicly available information, the timing of generic drug approvals and the total number of generic manufacturers for all small-molecule drugs approved between 1984 and 2015 were characterized. Second, this study investigated the impact on drug prices and shortages of a specific FDA regulation, called the Unapproved Drugs Initiative. The first analysis demonstrates that among 417 FDA-approved drugs, 210 were eligible for generic competition, and 77 (37%) had three or fewer generic drugs approved: 16 had three generic approvals, 9 had two, 16 had one, and 36 had zero. Among the 174 drugs with at least one generic approval, the median number of generic approvals was 7 (IQR, 4-12). Generic approvals were fewer among orphan-designated drugs when compared with non-orphan-designated drugs (18 of 33 [55%] vs. 156 of 177 [88%]; p\u3c0.001). The second analysis found that since 2006, 34 unapproved prescription drugs had been addressed by the Unapproved Drugs Initiative (UDI). Nearly 90% of those that went on to receive FDA approval were supported by literature reviews or bioequivalence studies, not new clinical trials. In addition, once targeted by the UDI, drugs experienced price and shortage increases of nearly 40% and 74%, respectively. Overall, more than one-third of drugs approved after 1984 and without protection from patents have three or fewer generic competitors, making them vulnerable to price increases. By unintentionally reducing the number of manufacturers for specific drugs, the FDA’s Unapproved Drugs Initiative led to higher prices and more frequent and longer shortages, highlighting the importance of robust generic competition. In conclusion, insufficient pharmaceutical competition has created an environment enabling price increases of old, off-patent generic drugs, such as Daraprim and Epipen. This study highlights that a substantial number of additional, similar drugs is vulnerable to such price increases for a variety of reasons. Future efforts to reform generic drug policy should seek to boost generic competition, more carefully regulate drug prices, and address brand-name pharmaceutical companies’ strategies to obstruct the ability of generic manufacturers to compete. In addition, physicians and patients should be bettered educated on the fact that a lack of generic competitors may mean that simply prescribing generic drugs will not make medications affordable for patients; alternative options may have to be explored. Such efforts are essential in ensuring continued patient access to affordable drugs