Legislation Targets Prescription Drug Costs, Competition Incentives in Generic Market

In January, lawmakers introduced bipartisan legislation that focuses on promoting generic drug development and cutting prescription drug costs. The Lower Drug Costs through Competition Act has been introduced through HR 749, a House of Representatives bill that amends the Federal Food, Drug, and Cosmetic Act in order to boost competition and incentivize generic product development. Almost identical legislation presented in March 2016 serves as the foundation for the new bill, which press- es further with added provisions designed to lower drug costs and speed up the FDA’s review process.

The new bill, proposed by Representatives Gus Bilirakis (R-FL) and Kurt Schrader (D-OR), would encourage generic drug makers to compete through incentives, ideally spurring competition in market areas where it does not normally exist. Provisions include requiring review and approval of generic drug supplements to applications (1) for which there is a shortage or (2) that have not been recently introduced to the market by more than 1 manufactur- er and for which tentative approval has not been granted to more than 2 applications.

The proposal touts a priority review voucher (PRV) incentive program for generic drug makers. With this PRV, which would be awarded to companies that bring a drug to a market where there is no current competition, manufacturers are promised prioritized and expedited FDA drug reviews. A generic PRV would require review or action on the Abbreviated New Drug Application no later than 180 days after the application has been submitted and accepted. The FDA’s current priority review process offers expedited reviews and approvals to drug applications that show promise, with an 8-month target goal for action. The 180-day review period proposed in the new bill promises a slightly shorter target goal.

Another proposed legislation targeting the generic industry is the Increasing Competition in Pharmaceuticals Act, which was reintroduced in early February. This bill also proposes PRVs to drug manufacturers, offering expedited reviews to drug applications for medical and drug shortage. The legislation was referred to the Senate Health, Education, Labor and Pensions Committee for consideration.

At a House Energy and Commerce Committee hearing on February 2, 2017, Chairman Greg Walden (R-OR) voiced his support for Lower Drug Competition Act by citing a need for increased transparency around the backlog of generic drug application at the FDA.

Although the FDA is taking heat for lagging drug approvals, the agency has chipped away its generic backlog considerably over the past year. According to the FDA’s most recent generic drug review dashboard, the number of filed ANDAs with no communication from the FDA dropped from 581 to 351, as of January 1, 2017. Several generic products, from companies such as Teva and Amneal, have been approved so far in 2017.

Additionally, the FDA generated its highest number of approvals in 2017, with more than 800 generic drug approvals, including full and tentative ones, according to the FDA blog.

However, the issue of generic drug pricing and accessibility to patients in need is still prevalent. Lawmakers devised the legisla- tion with the hope of remedying the situation with increased drug competition and an amended review process. The bill is among several other drug industry legislative proposals.

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