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AAM report: Complex generics could save U.S. healthcare system $1.3B per year  

Sandra Levy
Senior Editor
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The Association for Accessible Medicines’s new economic analysis has found that delays in the approval of complex generics are costing the U.S. health care system an estimated $1.3 billion each year.

The analysis, titled “Potential Savings from Accelerating US Approval of Complex Generics,” was sponsored by Teva, and unveiled at an event, hosted by The Hill and sponsored by AAM, discussing the role of complex generics in the prescription landscape.

Complex generics, including epinephrine auto-injectors for anaphylaxis and inhalers used to manage asthma, treat chronic and serious medical conditions, such as multiple sclerosis, schizophrenia, metastatic breast cancer and diabetes.

Increasing the volume of first-cycle FDA approvals for complex generics, improving guidance practices and enhancing predictability in the regulatory process would generate savings for the health care system and provide significant benefit to patients, said AAM.

"Biomedical innovation is delivering more targeted and effective medicines, but they are also more complex and costly," said AAM CEO Dan Leonard. “The generics industry plays a critical role in increasing patient access to these important innovations by developing more affordable complex generics. Patient access to complex generics can be improved by building a better FDA review process for these important medicines. We applaud the agency for all its work to speedup access to generics, which now account for 90% of all prescriptions. More can be done to realize the potential of the next generation of generics – complex generic drugs – for patients, the health care system and the U.S. economy.”

To conduct the analysis, Alex Brill, founder of the economic research firm Matrix Global Advisors and former policy director and chief economist of the House Ways and Means Committee, examined seven branded complex medicines with generics available in Canada or Europe but not in the United States. Each of these products currently have generic applications pending with FDA.

Based on estimates, generic competition in the U.S. for the seven complex products in this analysis would yield annual savings between $600 million and $1.7 billion, with a median savings estimate of $1.3 billion.

Prescription drug pricing and health care costs remain an important focal point for policymakers, said Brill. Reducing regulatory ‘friction’ and accelerating approvals for complex generic medicines offer an opportunity to lower prescription drug prices in the United States and ensure patients have access to the medicines they need.

Generic medicines have saved the U.S. health care system more than $2.2. trillion in the past decade, and many branded medicines, including a number of complex products, are set to lose patent and exclusivity protections in the coming years. The FDA review process for complex generics is governed by the Generic Drug User Fee Amendments, or GDUFA and set out in a commitment letter negotiated between FDA and the generic industry.

Congress passed GDUFA I in 2012, intending to speed up FDA’s approval of new generic drugs, stimulate competition for branded drugs and reduce drug prices for consumers. GDUFA II was passed in 2017. FDA and industry are currently negotiating GDUFA III, which Congress is set to reauthorize in 2022.

"We are grateful to partner with other key industry stakeholders in the GDUFA negotiations to ensure the review process for generic medicines is transparent, predictable and clear. We all have the same goal – to increase access and affordability to needed medications for patients," said senior vice president and chief operating officer of U.S. Generics at Teva USA Christine Baeder. "The ultimate goal is to increase the number of first-cycle approvals for complex generics, provide better product guidance practices and create greater regulatory predictability."

Congress enacted GDUFA to ensure patients have access to safe, high-quality and affordable generic drugs. GDUFA enables FDA to assess industry user fees to bring greater predictability and timeliness to the review of generic drug applications. FDA held its first virtual public meeting to discuss GDUFA III in July 2020. Meetings are ongoing and minutes from each session are posted on FDA’s website.

View the virtual event with Members of Congress, representatives of patient groups and other thought leaders discussing “Complex Generics & The Prescription Drug Landscape” sponsored by AAM through an educational grant provided by Teva.

Download the white paper sponsored by Teva.