Industry touts savings potential of generics and biosimilars
- Generics and biosimilars saved the U.S. healthcare system $93.6 billion between 2012 and 2016, and could save a further $140 billion between 2017 and 2021, according to the Association of Accessible Medicines' latest white paper. The ramp-up will be driven by a higher rate of patent expiries than seen over the past few years.
- AAM, the generics industry trade group, warned that potential savings from generics and biosimilars may be challenged by approaches that block or delay generic and biosimilar entry, including by branded companies and regulations themselves.
- The report is the latest among industry groups pointing the finger to another actor in the healthcare system for high drug prices. PhRMA, for example, has called out pharmacy benefit groups and hospitals. Generics and branded companies have fought for years over patent exclusivity.
Healthcare costs are rising in the U.S., and one of several driving factors is the cost of prescription drugs.
In 2016, branded drugs made up 11% of prescriptions but 74% of total spending on medicines.
Another driver is the increase in specialty medicines; the latest white paper from the trade body quotes figures from the Quintiles IMS Institute that while specialty medicines are used by only 2% or 3% of patients, they will make up around 50% of spending in 2018.
Makers of generics and biosimilars argue that their products provide competition, which limits increases in the prices of branded drugs, and so they are a vital part of a healthy and sustainable marketplace. The AAM claims that this competition is being blocked by unfair practices, which in turn limit the savings available to patients in the U.S., and prevent them from accessing fairly-priced drugs.
Developers of branded drugs block generic companies from carrying out safety and bioequivalence studies of their own versions of off-patent therapeutics by refusing to sell samples of the originator drug using risk mitigation rationales.
AAM is calling for Congress to pass the CREATES Act to compel provision of the required samples. PhRMA is pushing hard to block it, though, and successfully kept it out of the recent congressional budget deal.
In another delaying tactic, the patent laws are used to create webs of patents around drugs to delay biosimilar and generic competition, increasing a drug lifecycle.
“Unless policymakers take steps to address these challenges, the risk of shortages among generic drugs is likely to increase further, threatening patient health,” says AAM President and CEO Chip Davis.
The Food and Drug Administration's regulatory approach to complex generics – generics with complex molecules or that have complex delivery systems or devices – hasn't always been clear. While things are changing, as the report states, "Ultimately, the ability of generics to benefit from lower-cost versions of complex medicines will depend on FDA’s ability to support continued generic innovation."
Drugmakers have been on defense for years over high-drug prices, in recent years coming in with price tags of tens of thousands of dollars a year.
More recently, generic drugmakers have come under fire for spikes in prices of off-patent drugs. The AAM tried to put the blame more squarely on branded drugs, arguing the actual dollar price of a drug is more relevant than the percentage increase.
Big pharmas surely disagree.
Originator companies say drug development, especially where complex biologics are concerned, is a long and costly process.
Often cited is a 2016 study from the Tufts Center for the Study of Drug Development, which puts the average cost to develop and gain marketing approval for a new drug is $2.558 billion, rising to $2.870 billion when post-approval costs are added in. The time taken to develop a drug can be decade or longer.
But the costs of R&D are disputed and sometimes hard to track, with some critics doubting the Tufts' figures, in particular noting the group accepts industry funding.
The inter-industry squabbling over steep drug prices shows no signs of abating.
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