Discussion about "authorized generics"

"Authorized generics benefit consumers by putting a downward pressure on drug prices," said Lori Reilly, the vice president of policy and research at Pharmaceutical Research and Manufacturers of America. But opponents, led by the Generic Pharmaceutical Association, say authorized generics are anti-competitive and will hurt consumers over time by eroding profits for generic drug makers, which kills their incentive to try to speed cheaper copycat drugs to market.

The Knight-Ridder report states:

While several court decisions have upheld the legality of authorized generics and the FDA has denied petitions to address the matter, many maintain that such drugs should be restricted. And Congress is listening.

At the urging of Sens. Charles Grassley, R-Iowa, Patrick Leahy, D-Vt., and John Rockefeller, D-W.Va., the Federal Trade Commission recently agreed to do a yearlong study on the short- and long-term effects of authorized generics.

The study will examine, among other things, the business reasons for launching the drugs and their effect on overall drug pricing.

Apotex Corp., a Canadian generic manufacturer, had six months' exclusivity for a generic version of the anti-depressant Paxil [paroxetine] in 2003. The company expected sales of up to $575 million in the first six months. But the maker of Paxil, GlaxoSmithKline, introduced an authorized generic version and Apotex's six-month sales topped out at between $150 million and $200 million.

***Additionally

Drug companies are again paying generic companies to drop patent challenges that could make copycat drugs available before the patents on the original drugs expire. The practice has increased because several federal court decisions reversed earlier determinations that such deals were an illegal restraint of trade, Jon Leibowitz of the Federal Trade Commission said this week.

Just like at the USPTO, the FDA is developing a backlog. A Food and Drug Administration backlog of 800 applications for generic drug approvals will likely slow access to cheaper drugs.

Dr. Scott Gottlieb, the FDA's deputy commissioner for medical and scientific affairs, told generic-drug executives in February that some applications aren't reviewed until the statutory review time of 180 days is nearly reached.

Staff shortages are part of the problem, but the FDA also blames generic firms for submitting faulty applications.

One sees that the expiration of a patent on ONE DRUG in a field can adversely impact the sales of ANOTHER DRUG which remains on patent. Anticipating the expiration of one patent, Express Scripts, one of the nation's largest pharmacy benefit companies, recommended in 2005 that drug plans under its management make the cholesterol-lowering statin, Zocor (patent expiry June 2006), their preferred medication instead of the top-selling Lipitor.

Also, although GlaxoSmithKline's patent for the allergy medicine Flonase expired in May 2004, the cheaper generic version didn't hit the market until March 2006.

The delay was the result of a series of aggressive administrative and legal maneuvers by GlaxoSmithKline that thwarted the speedy entrance of the generic. After a federal judge in Baltimore rebuffed Glaxo's final legal challenge on March 6, 2006, the generic version by Roxane Laboratories hit store shelves.

atents are set to expire on 75 brand-name drugs over the next two years and on an unprecedented 252 by 2014. A study by the Pharmaceutical Care Management Association released on April 18 found consumers and health plans could save more than $26.4 billion over the next five years by using cheaper generic versions of just 14 brand-name drugs scheduled to lose their patent protection between now and 2009.

See story

The generic sells for $61.99 at Walgreens.com, while Flonase costs $81.99. At CVS.com, the generic is $68.59 vs. $85.29 for Flonase.