BIG PHARMA COULD CASH IN ON FDA'S GENERIC BACKLOG

Thanks to the FDA's backlog ofover 800 applications for genericdrugs, branded pharmaceuticalscould reap substantial rewards inannual sales that might have gone totheir generic counterparts. An estimated$100 billion in branded medicinesare expected to lose theirpatents in the next 5 years, and thisshould have translated into lost revenuefor big pharma as they competed with lower-costinggeneric versions of their drugs. But the FDA's Office of GenericDrugs (OGD), which reviews generic drug applications, faces anoverwhelming backlog, the result of a 36% surge in applicationsin 2005, according to the Generic PharmaceuticalAssociation (GPhA), citing statements made by Gary Buehler,director of the OGD, at a GPhA conference in February 2006.

This is bad news for generic drug manufacturers, but greatnews for branded drug makers, who can continue to selltheir products after their patents expire without fear ofgeneric competition. In this year alone, $20 billion worth ofdrugs are expected to go off patent, and if half of the applicationsfor the generics of these drugs cannot make itthrough the FDA backlog, the branded companies couldexpect an extra $10 billion in annual sales that would havegone to their generic counterparts.