Todd Ebert
By Todd Ebert
Patients have long relied on generic drugs to reduce costs and increase access to essential medications. However, significant price spikes for some generic drugs – including Mylan’s EpiPen, as well as products from Valeant, Turing and others – are jeopardizing patient access to affordable healthcare.
Price spikes often occur where there are two or fewer manufacturers for a given product in the market and where a lack of competition among manufacturers allows high prices to go largely unchecked. Situations like these highlight the critical importance of increased competition in the generic drug marketplace to help mitigate price spikes.
Recently, governmental agencies, medical journals and leading medical researchers have released new research and reports on pharmaceutical pricing and the positive impact of competition on the generic drug marketplace.
In July, the Journal of the American Medical Association (JAMA) published a study conducted by Harvard Medical School Researchers on prescription drug cost drivers in the United States. The study authors found that the FDA’s backlog of abbreviated new drug applications (ANDAs) has, in some instances, led to delays of up to three or four years for product review and approval, which can discourage manufacturers from trying to bring competitive products to market.
A July 2016 report from the Government Accountability Office (GAO) found that increased competition from suppliers is part of the solution to persistent shortages caused by manufacturing and quality control problems that disrupt supply in the generic drug market.
Last month, the GAO published another report, this time on generic drug price spikes in the Medicare Part D program, which found that significant price spikes for some generic drugs jeopardize patient access to affordable healthcare and drive up costs for patients, providers, Medicare and American taxpayers. The report affirmed what healthcare group purchasing organizations (GPOs) hear both from healthcare provider members and from generic drug manufacturers:
- Competition in the generic drug market is critical to mitigating price spikes.
- A broad range of factors, including access to active ingredients, production complexity, and supplier consolidation affect competition.
- A reduction in the FDA backlog of ANDAs could increase competition in the market.
The FDA backlog for ANDAs and its median review time for product approval have consistently grown – from 30 months prior to 2011, to 36 months in 2013, to an estimated 42 months in 2014. A three- or four-year wait time stifles the ability of manufacturers who want to introduce competition in the generic market.
HSCA and its members consistently advocate for policy solutions that reduce costs, increase competition, and remove barriers to market entry. We support the “Increasing Competition in Pharmaceuticals Act” (S.2615), bipartisan legislation that would mandate FDA priority review of ANDAs for products with only one manufacturer. Congress should also consider mandating priority review for generic injectable drugs with two or fewer manufacturers and in instances where there have already been price spikes of a certain percentage. Specifically, we urge Congress to mandate FDA priority review of an ANDA in instances where the market price of an existing product increases at a rate of more than five times the percent change that occurred in the Prescription Drugs Index of the Consumer Price Index for the previous year.
Common-sense policy solutions such as these will help foster competition, speed up entry for new manufacturers and help avoid generic drug price spikes in the future.
Todd Ebert, R.Ph., is president and CEO of the Healthcare Supply Chain Association (HSCA).