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Scott Gottlieb, MD - Annual Generic Drug Forum

This text contains Dr. Gottlieb's prepared remarks. It should be used with the understanding that some material may have been added or deleted during actual delivery.

Speech before
Annual Generic Drug Forum

Remarks by
Scott Gottlieb, MD

Deputy Commissioner for Medical and Scientific Affairs


April 7 , 2006

Thank you for the opportunity to be here today. As a practicing physician, I am well aware of the enormous contribution to our nation's health by the more than twelve thousand medications on the market for which American patients will spend an estimated $248 billion last year. I know first-hand some of the improvements in health that have been made possible by the introduction and appropriate use of better medications.

I also have high expectations for the many new drugs now in the pipeline. At the earliest stage of drug development, at the investigation new drug or IND-phase, when sponsors come to FDA to ask permission to begin testing a new drug in people for the first time, we are seeing some very innovative molecules aimed at a lot of unmet medical needs.

These new drugs hold unprecedented potential for saving still more lives, reducing still more suffering, and preserving still more productive energy for our nation.

The innovations being developed by branded pharmaceutical companies require great investment of scientific effort and other resources, with an uncertain return. We all therefore recognize that innovators must be able to receive adequate compensation through our patent system. Otherwise, pharmaceutical research and the development of better medical treatments could sputter to a halt.

And it is clear that the high prices of many innovative drugs in the United States, which alone has avoided government price controls, are sustaining pharmaceutical research and development worldwide. This is good for pharmaceutical innovation, and for patients who can be treated or even cured by new innovations that will make their way to the marketplace. But it also creates a serious challenge for many Americans, who are having difficulty paying the high and rising costs of up-to-date drug treatment.

This is where the generic drug industry plays an essential role in promoting the health of Americans. Generic drug manufacturers produce medications that are just as safe and effective as their brand name counterparts. Part of the FDA's mission is to make sure that is the case. Yet the prices of generic drugs are much lower.

In fact, the price of a generic drug can be as low as 20 percent of the price of the brand name product it mimics, according to our analysis of IMS data that was recently posted to our website. Most of these price reductions occur after only two or three generics enter the market.

Further, generics are a large and growing part of total medicine use. Newly-completed analysis by FDA shows that about two-thirds of all prescription drugs used in the U.S. in 2004 was generic according to IMS data on U.S. retail sales. Generic drugs represented 66.4 percent of the total prescription doses (extended units) sold in 2004, compared with 61 percent in 2001. And generic drugs are going to continue to grow in importance. According to IMS, brand name medication with annual sales of approximately $64 billion will come off patent in the next five years.

The best way for all of us to preserve our system, which rewards new innovations while balancing the need to pursue affordable options for patients who have limited means, is to continue to encourage rapid and fair access to generic medications after the expiration of appropriate patent protection and periods of market exclusivity. This is one of our major priorities at FDA. Americans need rapid access to generic drugs more than ever, and we know that the FDA has to do its part in making these products available.

There are many steps we are taking in achieving this goal, and still more we plan to do. Today I want to discuss with you the work we have done over the past several years to improve our process for reviewing and approving safe and effective generic medicines, some of the new commitments we are going to be making to continue to improve our review process, and then some of the places where we need your help and where we can work together.

I want to start by saying at the outset that I reject the recent criticism of our budget at FDA, and by that I mean those who call into question our commitment to the generic approval process. The fact is since fiscal year 2001, the budget of the Office of Generic Drugs has doubled and during this time the overall number of full time personnel has increased from 143 to the present level of 201. In 2005 alone, 12 employees were added and we plan to add more in 2006.

Now it is true that these are tough budgetary times for every agency, not just FDA. So we need to use resources efficiently. But there is a lot we are doing right now, and more we intend to do, in order to make sure that our generic approval process is modern, efficient, and well supported.

It’s clear we cannot continue to improve our generic drug program alone. We will also need the help of the generic drug industry. For example, we must continue to work together to make sure that the quality of generic applications continues to improve so that more of them can be reviewed and approved on the first cycle. And we must work together to better develop the scientific base for making generic versions available for drugs such as inhaled medicines, or dermatological agents, where some of the science for demonstrating equivalency still needs to be mastered.

One part of achieving the goal of increasing availability of safe and effective generic medicines -- the review process itself -- is in large part under the control of the FDA. And I want to start my discussion here. Review times are a function of the efficiency of our review process and our available resources. So I want to tell you about some of the things we’re doing at FDA, and some of the things we’ll soon be committing to doing, in order to make sure that the process for demonstrating the safety and effectiveness of generic medicines is efficient and modern and gets patients the generic medicines they need as soon as possible after legitimate patents have expired.

The Office of Generic Drugs receives about 40 to 50 first generic submissions a year and has a very strong record of timely approvals for the first generic to reach the market after the parties resolve any patent issues. These first generics have the greatest impact on the market and on the public health. They can significantly reduce medical costs to patients. We promptly review and approve these first generics. Generic companies often receive our approval to market their products on the same day that any patents or exclusivities expire.

It is true that we have seen significant growth in the number of applications we receive, and expect even more growth in the future. But under the direction of Gary Buehler, the dedicated staff of the Office of Generic Drugs has not only been accommodating their increased workload, but making significant strides to make the review process even more efficient. The Office of Generic Drugs has continued to increase the number of approvals and reduce the overall time to approval, with the median time to approval in 2005 of 16.4 months down from 23 months in 1996. That’s a 40 percent reduction. In fact, in Fiscal Year 2003, we approved or tentatively approved 132 applications in less than 15 months after the receipt. In 2004 this 15 month figure went to 146, and in 2005 it jumped to 174, with 106 applications approved in less than 12 months. In addition, in 2005 FDA fully approved 361 applications. This is an all-time record for the agency.

To tackle this increasing workload, and to enable these improvements in the time it takes generic medicines to reach the market, FDA has introduced a number of process changes and other quality systems approaches to our work.

The Office of Generic Drugs has begun to review applications submitted at the end of five year new chemical entity (NCE) exclusivity in “clusters” to increase efficiency and decrease review time. For these products FDA often receives multiple applications from different sponsors submitted on the same day. A team is assigned to review these products and grant approvals based upon this review. Since some of these products no longer have patent protection, they represent immediate savings to the American public upon approval.

An example of the impact of these cluster reviews can be seen with the approval of zonisamide, a product for the adjunctive treatment of partial seizures in adults with epilepsy. The Office of Generic Drugs received more than a dozen abbreviated new drug applications for this product and the review team effort resulted in the approval of 10-first time generic applications for this product in about nine months of review time.

There have also been technological advances to the generic review process which directly affects sponsor applications, and ultimately FDA review time. For example, FDA has posted on the Internet a database with dissolution information. This is very important information for sponsors of applications and decreases the requests to the agency, in turn freeing reviewer time.

The Office of Generic Drugs is also working to encourage more widespread use of technology for the submission of applications. As industry pursues the adoption of electronic formatted applications by industry we expect to be able to further increase the efficiency of our reviews.

It is important to remember, however, that lower review times by themselves do not improve the health of the public. What we need is actual improvement in generic drug availability. And in order to get more generics in the pharmacies and to our patients' bedsides, we have to meet two additional requirements.

First, the products we review must be demonstrated to be safe and effective -- meaning, they must demonstrate therapeutic equivalence to the brand drug, and they must be appropriately labeled and safely manufactured.

And second, there must be science available to easily make these determinations of equivalency. For certain forms of small molecule drugs, particularly inhaled medicines, and certain liposomal drugs, the technology for demonstrating sameness and even similarity is not very advanced.

On the positive side, the number of full and tentatively approved generic applications has gone up significantly, from 266 in FY 99 to 467 in FY 2005.On the other hand; median times to the issuance of an approval or "tentative approval" letter -- which used to be longer than two years -- are yet to drop below 16 months. That means, even as we are making large strides in reducing our review time, there is still substantial room for improvement in total time to approval. And although many generic applications have been approved within one year, this timeframe is still the exception rather than the rule.

Moreover, even after the FDA issued a tentative approval, some potentially important generic drugs have remained unavailable because of legal challenges. In particular, the process of filing citizen’s petitions has come under attack recently by some who assert that sometimes “frivolous” petitions are being used solely to delay the generic approval process.

First, on that latter issue, we believe these petitions provide the public an invaluable tool for getting good scientific arguments in front of FDA, and we do not support efforts to close off this important route of dialogue. But we are also looking at ways to make additional improvements in our process for handling these petitions, to make sure that they do not inappropriately delay entry of legitimate generic drugs because of inefficiencies in our own process.

There is another reason some generics are not more quickly reaching patients that is also not completely under our control. Very often, multiple review cycles are required. Unfortunately, large shares of the initial generic applications are still not up to the FDA's requirements.

This critical obstacle to increasing generic drug availability cannot be removed by the FDA alone.

Among the 100 or so generic firms that we deal with, there are many whose ANDAs usually include few deficiencies, and can be approved in a timely manner. But there are also some manufacturers who lack experience in developing their applications, and, more importantly, who do not conduct adequate product development before they submit their initial application. Also, they are often slow to provide the additional information we need.

The result is multiple cycles and delays in generic drug availability, even if FDA handles each cycle efficiently. Based on 2004 and 2005 statistics, 98.4 percent and 93 percent of generic applications were not approved on the first cycle, and 57.3 percent and 59 percent were not approved even on the second cycle. The number of “refuse to file” letters has also not changed significantly over the last several years. Another element affecting total review time is the time that it takes for firms to respond to deficiencies identified during the review of an application. Some firms respond very quickly with a full accounting of information necessary. Others may not respond as quickly, and these additional weeks or months add to approval times.

I am sure there are many causes of multiple filings, and that in some cases they simply can't be avoided. And it is recognized that some firms, due to internal priorities, do not wish to pursue certain applications as quickly as others. Thus, some “firm time” is quite lengthy. I also know a lot of effort has been made in the last several years to work more collaboratively to improve the completeness of applications, and application success rates have improved. But there is still more we can do.

We must continue to find ways to communicate more clearly, in advance, about what the standards are and how they can be met. One thing you can help with is the quality of the Drug Master Files, which relate to the active pharmaceutical ingredient. This is often submitted separately by foreign firms that do not have a lot of experience working with FDA, and are not under the direct control of the generic drug makers.

These applications are the ones that cause us the most frequent problems, and prompt us to have to start a second cycle. Generic firms should choose active pharmaceutical ingredient (API) suppliers carefully, and where possible, use their position as the customer of these API firms to help us work to develop better applications that can be successfully reviewed during the first pass through FDA.

Now I am aware of the background. From my discussions with Gary and others involved with our program, I know that FDA has not always been able to provide the kind of ongoing communication with generic companies in developing their applications that is an integral and expanding part of FDA's "smarter regulation" to reduce the costs of developing safe and effective new drugs.

To deal with these challenges, to help sponsors get better feedback so that more applications come in complete and can be reviewed and approved on a single cycle, over the last two years, the Office of Generic Drugs has assessed and revised the review process to determine where economies of effort could be incorporated and more expert consultation could be provided in order to help sponsors develop complete applications.

The Division of Bioequivalence performs an initial assessment of dissolution parameters when an application is initially filed. If there are problems, the firm can be informed early and work to resolve the problems. Resolving dissolution issues frequently delayed the approval of an ANDA. When a large number of applications are received for the same product, usually five or more, the bioequivalence and chemistry reviews for all of the applications are conducted by a designated group of reviewers or a single team. This enhances both efficiency and quality of review since the small group is thoroughly familiar with the drug substance and can quickly assess the critical parameters of the drug product.

We have also expanded the simple but effective approach of utilizing telephone communication whenever possible. As Gary recently announced, we are lifting all restrictions on telephone communications. Very minor deficiencies can be communicated to firms in this manner and immediate clarification of requests may be sought by the applicant.

In 2005, there were more than 1,500 requests for information from generic drug developers for assistance with product development, up from 630 in 2001. This is a time-consuming effort for our staff, but as I said, one that pays off by helping generic drug developers come to FDA with more complete and high-quality applications on their first submission.

These kinds of communications have done a lot to increase the quality and efficiency of the review of new drugs, and we intend to bring the same kinds of quality approaches to our work on generic drugs, wherever possible.

To improve the time we have for better communication, whenever possible, drug master files (DMFs) are obtained and reviewed prior to the time the related application(s) comes up for review. Since DMF issues frequently delay approval of ANDAs, this early intervention can and does speed approval times. The divisions of chemistry and bioequivalence are more fully utilizing the skills of the project managers to answer selected inquiries and to process administrative supplements to applications thus freeing the reviewers’ time for review of new applications and supplements requiring in-depth scientific analysis.

We will continue to work to find additional ways where we can identify opportunities to improve the process. Just to mention some other things we have done recently:

Scientists were hired for additional Division of Bioequivalence teams and to form a third chemistry review division. There has also been some expansion of the microbiology and medical teams, as well.

In addition to hiring additional review staff and related purchases of necessary information technology equipment with appropriated funds, the OGD management led the staff to explore alternative processes. Changes in process include: The chemistry divisions’ team leaders have always evaluated proposed changes being affected (CBE) supplements. Now, if the changes are acceptable as CBEs, the supplements are approved without a burdensome in-depth review by a reviewer. Since there is an assessment of the manufacturing process during inspections in conjunction with the Office of Compliance, further action in OGD is redundant.

And the OGD Scientific Staff now addresses most issues raised in Citizen Petitions and complicated requests for information. Previously, review staff had to take time away from reviewing applications to address the petitions and all information requests. That is no longer necessary and more reviewer time may be devoted to review of ANDAs.

The Office of Generic Drugs, under Gary’s outstanding management, is in the process of implementing a number of additional changes to the review process to provide additional efficiencies.

First, we will be putting forth a policy soon that will allow us to formally prioritize the review of certain high public-health priority generics for which there is no blocking patent and represent the first generic for a given product. This applies especially to the first-in-class generic applications. These are the ones with the most significant public health benefit, and we plan to treat them as the highest priority applications in the review process. As an analysis we posted to our web site this week shows, the introduction into the marketplace of just two generic versions of a brand-name drug can reduce the cost to consumers by nearly half, and as more generic versions of the same drug are produced, the price continues to fall. This approach would focus scarce review efforts on applications that can be approved and made available sooner to the American public. Since the goal is to get generic drug products into the marketplace more quickly, after appropriate patents have expired, it is more effective to focus efforts on reviewing applications that can be approved and marketed while reviewing other applications closer to the time the products could actually be marketed.

The chemistry review staff in conjunction with the Scientific Staff in OGD will also be adopting a new review format termed the Question-based Review (QBR). This effort is in keeping with the Center’s Quality-by Design and Risk-based Review initiatives and allows for an over-all risk assessment for individual applications and dictates the level of OGD review needed for subsequent product changes. When fully implemented, QbR has the potential to reduce supplements by 80 percent, saving the industry and the Office time and money.

Some of the latest efforts from the Office have tapped the utility of the internet. As I mentioned early, dissolution parameters for about 200 oral products are now posted on the internet with many more products to follow. Previously, firms could only get this information by writing to FDA and waiting while FDA staff researched and prepared a response with the information. Now, firms have immediate access to the information and OGD can post new dissolution information once it is developed and not devote time to answering individual requests.

Similarly, guidance is being posted on the CDER web site that links to information sheets on the bioequivalence requirements for certain products. This guidance is unique in that it allows for additional products to be added as requirements for the products are determined. As with the dissolution posting, this saves time for industry and the reviewers since there is no longer a need for industry to send in requests for the requirements for these products and reviewers developing responses.

The Office of Generic Drugs is also working to encourage more widespread use of technology for the submission of applications. With the ICH Common Technical Document (CTD) and the harmonization of the QbR format with the CTD, an electronic CTD (eCTD) formatted application can be reviewed much more efficiently. This has been encouraged through workshops and meetings with GPhA and in presentations to industry in venues such at Drug Information Association meetings. As the eCTD is more widely adopted by industry, more efficient reviews are expected.

I have talked about efforts to improve our own internal review processes, and our efforts to work more collaboratively in order to give smart regulatory guidance that has been such a success in our new drugs program in improving the quality of the applications we receive and reducing the number of multiple cycles that applications must undergo. There is one other critical area where we need to work together to help improve the timeliness by which generic drugs reach patients: The pursuit of improvements in the scientific base for making generic versions of certain drugs.

There’s no question that we need to continue to work together to develop methods and standards for demonstrating therapeutic equivalence for a range of small molecule products for which equivalence cannot be shown simply by evaluating molecular composition and the dynamics of blood levels, as is the case with traditional oral, systemically absorbed drugs. For example, among the many metered-dose inhalers, there is only one generic product (albuterol). Ipratropium, beclomethasone and numerous other products are on the market without patent or exclusivity protection. But because of the difficulty in demonstrating bioequivalence with the current clinical trials and in vitro methodology, we receive few applications for these kinds of products.

Similarly, we need better methods for evaluating bioequivalence in nasal sprays. Because they are administered directly into the nasal mucosa and are locally-acting, blood levels are not appropriate as the sole method demonstrating bioequivalence. Consequently, to get approval for these treatments for such conditions as rhinitis and allergies, generic firms must perform comparative clinical trials and extensive in vitro testing. These approaches are time-consuming and costly.

A third type of generic products that poses a special challenge for our reviewers is topical dermatologics that are applied directly to the skin and are not substantially absorbed into the body. Their approval as generics is very difficult, expensive and unpredictable because of the high variability in clinical measures used to evaluate efficacy. We have investigated some surrogate measures for topical absorption, but so far, no method has been found to be scientifically valid and reliable enough for use in the approval process. We need to think hard and work with outside experts to determine what additional studies hold the most promise for addressing this shortcoming.

Finally, liposomes represent a relatively new, complex type of drug that poses new challenges for determination of bioequivalence. Liposomes can target a therapy to selected tissues and increase its effectiveness while reducing toxicity. While such targeting is advantageous, it means the usual bioequivalence method of measuring plasma concentration in the systemic circulation many not be applicable. Today, there are liposomal products available for oncologic and anti-fungal use. But there are no approved liposomal generics and there has been no research to establish appropriate bioequivalence standards for these products.

Supporting research in these areas makes a lot of business sense. Most of the products I mentioned are or will be very widely used, many are off-patent, and many more will be off-patent within a few years. By helping to develop the necessary bioequivalence methods and data, you would open significant new markets for your industry. To these ends, we have taken some important steps.

There are also steps we can take, working together, to pursue critical path opportunities to improve the pathway for generic drug development. Other possible areas to consider, where more modern scientific tools could lead to improvements in the critical path for developing generic drugs, include the development of physiological based pharmacokinetic models, bioequivalence waivers based on improved in vitro tests and a mechanistic understanding of product performance, and the identification of pharmacodynamic measures of safety. When we advance scientific principles, we also need to focus more resources on developing broad guidance documents that can articulate these new principles more clearly.

The Office of Generic Drugs has current but time limited contracts with academia and others to explore less complicated mechanisms for demonstrating bioequivalence of products such as nasal inhalation drug products, dermatological products, and newer types of products such as liposomals. The bioequivalence studies currently required in order to demonstrate bioequivalence of inhalation and topical products are expensive and time consuming and require longer, more burdensome reviews.

This is someplace where the industry can help, similar to the way we are developing better science in our new drug review process through public private partnerships as part of our Critical Path initiative.

In spite of all of these efforts and dedication of a highly trained review staff, as this organization has pointed out in its recent press release, there is an increasing backlog of unreviewed applications. Applications pending per month have gone up from around 400 in the first quarter of 2002 to about 800 in the first quarter of 2005. In the chemistry review divisions, applications are not coming up for review until very close to the statutory review time of 180 days.

Now you know that most of these 800 applications are for drugs that don’t come off patent for many, many years, so that number is misleading in a sense. But the fact that we are brushing up against the 180 deadline I know is more of a concern to many of you. This administration has put unprecedented resources into that program, doubling the size of the Office’s budget over the past five years. We must continue to work together to make sure we are deploying those resources as efficiently and effectively as possible.

I want to conclude by reminding all of us that the overriding goals we share are far more important than some particular issues on which our opinions may differ. We are committed to strengthening fair and effective competition by generic drugs, because we strongly believe that greater availability of these products, where appropriate patents have expired, can have significant benefits for improving public health and help control the growing cost of health care.

You will see more FDA activity and support for achieving these goals than ever before. But the success of your industry is not up to the FDA or Congress alone. I have pointed out some important challenges for your manufacturers that they must work to meet -- with strong support from FDA and the Administration.

We all are committed to protecting and promoting the health of our consumers and the strength and vitality of our nation. The surest and most efficient way we can advance toward these shared aims is, without question, by working together.