- Speech by
Association for Accessible Medicine’s GRx+Biosims Meeting
Good morning. Thank you, Chip [Davis]. I’m delighted to be here to address the Association for Accessible Medicines’ historic first G-Rx-Plus-Biosims meeting and to relay Dr. Gottlieb’s regards. I understand that by combining three of your top-rated previous conferences into one you created the largest gathering of the global generic and biosimilar industries in the world.
Today, I want to discuss a topic that is at the heart of what you do – ensuring that more generic and biosimilar medicines are more accessible to more people who need them.
I can assure you, that’s a goal FDA shares with you. Bringing more drug competition to the market and addressing the high cost of medicines is a top priority of the Administration and of the Secretary of Health and Human Services. Facilitating robust and timely market competition is also a key component of one of the FDA’s four priority areas for 2018. But to fulfill our public health mission, we believe we must balance these efforts by also encouraging and rewarding innovation in drug development.
Let me explain why we believe it is equally important to strike a balance between innovation and competition and to do so across the spectrum of pharmaceutical products from traditional small molecules to complex products to biologics.
To Dr. Gottlieb, drug innovation and drug competition are part of what economists like to call a “virtuous cycle” and what others might refer to as a positive feedback loop.
As Dr. Gottlieb explains it, innovation – itself driven by competition – improves health care and promotes access by providing products that would otherwise be unavailable, while competition for older and once innovative products promotes access by lowering prices.
While the FDA doesn’t have a direct role in how drugs are priced, it plays a key role in access to drugs because drug companies seeking to market in the United States must meet our regulatory requirements to gain approval. These regulatory requirements, in turn, may impact the cost of drug development, including the cost of research. And there are also costs associated with the research and development of investigational products that do not make it to the market.
To the extent that the FDA can ensure that our regulatory requirements are streamlined, predictable, and science-based, we can help reduce the time, uncertainty, and cost of drug development for branded drugs as well as generic and biosimilar alternatives and ultimately impact the cost of these endeavors. At the same time, we can help prevent the kinds of anticompetitive forces that can push effective treatments out of the reach of patients and prevent the full benefits of innovation from positively impacting the public health. And by lowering the direct costs of drug product development, as well as the time and risk embedded in these important efforts we also reduce the cost of the capital needed to underwrite new discovery, which in turn can translate to lower costs and greater opportunities for patients to afford and get the treatments they need.
I don’t have to tell you about the important role of generic drugs in creating competition that drives down drug prices and helps ensure greater access to medicines for patients. As your own recent report found, generic drugs represent 90 percent of all prescriptions dispensed in the U.S. Generic drugs, with their large market penetration and a cost that is typically 75 to 90 percent less than their brand name competitors, have had a profound dollars and cents effect on patients and the U.S. health care system. Use of generics has resulted in savings of more than $1 trillion over a decade and $265 billion in 2017 alone. And yet generics account for only about a quarter of the overall cost of prescription drugs used by Americans.
As many of you know, last year the Commissioner introduced the Drug Competition Action Plan (also called DCAP), to further encourage competition and help bring greater efficiency and transparency to the generic drug approval process. But it was important that we not sacrifice the scientific rigor underlying our generic drug program in the process. After all, achieving 90 percent of prescription drugs dispensed represents years of hard work building confidence in generic drugs. Maintaining that confidence must remain paramount to the FDA, as it must to all of you.
Since announcing DCAP, we have made significant progress in each of the Plan’s three major components:
First: While GDUFA streamlined processes and resulted in transparency and predictability for industry, we determined we still could do better. That’s why we are working on further streamlining the generic drug review process. In January we published a draft guidance for industry that, if finalized as written, would showcase the common deficiencies that continue to be seen in applications. Our intent was to help applicants submit high quality applications that could result in quicker review times and a higher percentage of first cycle approvals.
We also issued an internal policy guide on good ANDA practices designed to improve the quality and consistency of assessments. It recommends using a standard template, when possible, for greater consistency across reviews. It simplified the layers involved in review and decision-making, and it clarified roles and responsibilities. It encouraged reviewers to clearly explain deficiencies that are critical to meeting approval standards when communicating with applicants. It currently takes on average about four cycles for an ANDA to reach approval because the application is missing information necessary to demonstrate that the product meets our standards. As Dr. Woodcock has told your industry many times, these multiple cycles of review are costly and inefficient to both FDA and industry.
We have also implemented a new pathway authorized under the FDA Reauthorization Act of 2017, or FDARA, for competitive generic therapies, which are drugs with inadequate generic competition. This pathway is intended to incentivize and expedite the development and review of these products.
In addition, to increase savings for the public, we have updated our prioritization policy and are now prioritizing the review of generic applications up to the third generic approval, since having more generics on the market can help drive down drug prices through competition. The need to maintain efficient and modern generic regulation does not stop at approval, and we continue to identify means to maintain modern, efficient practices throughout the lifecycle of generic products. For example, we are looking into ways to keep generic drug labeling up-to-date when sponsors of the brand reference drugs voluntarily withdraw their marketing applications and thus stop updating their labeling.
The second component of our DCAP plan has been to support the development and to enhance the review of complex generic drug products, which generally have at least one feature that makes them harder to “genericize” under traditional approaches, while applying the same rigorous approval standards applied to the review of all generic drug products. To achieve this goal we have formalized and operationalized a new GDUFA II pre-ANDA program which provides opportunities for sponsors to meet with the FDA to gain clarity on regulatory expectations early in the development of complex generics, which can improve development timelines.
We’ve also issued over 1,600 product-specific guidances over the years, many for complex generic drug products. In addition, the FDA’s generic drug regulatory science program has been working to develop more efficient tools and methods to demonstrate the bioequivalence of complex generics, which are detailed on our GDUFA regulatory science webpage, and through additional guidances on important topics of general applicability to complex generic drugs.
The third component of our DCAP plan is to seek to reduce the so-called “gaming” that can frustrate and delay generic drug approvals and extend brand monopolies beyond what Congress intended with the Hatch-Waxman Amendments of 1984.
We have heard that some brand manufacturers use tactics to prevent generic developers from obtaining the samples of the brand drug that are typically needed to conduct testing to demonstrate, among other things, that a generic medicine is bioequivalent to its brand reference drug. The FDA has received more than 150 inquiries from generic drug developers seeking assistance with this problem. Such tactics are inconsistent with the intent behind the statutory framework and raise questions about whether the current system for distributing prescription drugs serves the best interests of patients and the public health.
Our approach to the problem depends on whether the product is part of a Risk Evaluation and Mitigation System program, or “REMS,” with elements to assure safe use that may impact distribution. However, in all cases, at the request of the Federal Trade Commission (FTC), we refer the access inquiry to the FTC — the agency responsible for addressing anticompetitive business practices —and encourage generic drug developers to submit these inquiries to FTC as well. We’ve also formed an interagency working group to explore areas where the FDA can more closely collaborate with the FTC about anticompetitive activities.
If there is an existing REMS program in place, generic drug developers generally should still be able to secure samples of the product. To facilitate the transfer of samples in these cases, the FDA has a voluntary process through which generic companies can submit their bioequivalence testing protocols to the agency, and we will evaluate these protocols to assess whether they contain safety protections comparable to those in the brand product’s REMS program.
If we determine that the generic drug developers’ plans include appropriate protections, then the generic drug developers can request that the FDA send a letter to the brand company stating that the generic company’s study protocols include safety precautions for testing comparable to those set forth in the brand drug’s REMS and that FDA will not consider it a violation of the REMS for the brand drug maker to provide the generic company with a sufficient quantity of the brand drug to perform the testing necessary to support its application. These notifications are called Safety Determination Letters.
To date, we’ve issued more than 20 of these letters in response to requests from generic drug companies. Nonetheless we continue to get complaints from generic drug developers who report that they have not been able to secure the necessary samples of a brand name product. We recently posted on our website a list identifying all drug products for which the FDA has received inquiries from prospective generic drug developers reporting problems obtaining access to necessary samples of the brand drug. We will continue to address and improve transparency, where appropriate, about these access issues and other potential gaming tactics that may delay the generic competition Congress intended.
In addition, we’ve issued draft guidance to help generic firms navigate the development of single, shared-system REMS with brand drug makers, which can be a lengthy and complex process. Bringing together multiple products under one REMS program can have real benefits for the health care system, including for providers. But the process of developing a shared REMS shouldn’t become a tool that drug companies can use to delay or block competition from generic products or hinder their ability to enter the market. When final, our draft guidance will help make this process more efficient. The second draft guidance, Waivers of the Single, Shared System REMS Requirement, when final, will describe when and how the FDA will consider waiving the single, shared system requirement, and how generic applicants can request a waiver.
Another anticompetitive technique involves the use of citizen petitions that are subject to section 505(q) of the Federal Food Drug & Cosmetics Act. It is sometimes argued that these petitions block generic entry. While the record shows that citizen petitions have rarely delayed specific generic drug approvals, there is no doubt that the process requirements associated with 505(q) petitions can add to resource burdens on the generic review process and the FDA’s regulatory decision making. The FDA will soon issue new draft revisions to our 505(q) guidance that are intended to allow for a more efficient approach to 505(q) petitions and allow us to focus more reviewer resources on scientific reviews.
Finally, our Fiscal Year 2019 Budget proposal includes an important legislative fix to help address gaming. The proposal would make the eligibility for tentative approval of a subsequent generic drug applicant that is blocked solely by a first applicant’s 180-day exclusivity, where certain other conditions are met, a trigger of the first applicant’s 180-day exclusivity. This means that the period of exclusivity would begin immediately for the first filer in certain circumstances. This proposal will enhance competition, facilitate more timely access to generic drugs, and is expected to create meaningful savings.
Our focus and work on generics is already bearing fruit. Last year, we approved a record number of new generic drugs, including 80 first generic drugs. In July we saw the highest number of approval actions in the history of the generic drugs program in a single month with 126 total approvals (96 final approvals + 30 tentative approvals). And last month, for the first time, we approved several strengths of a generic drug product with a Competitive Generic Therapy designation and did so in the first cycle of review.
Achieving a competitive marketplace for biologic drugs is equally crucial and, in fact, is becoming more important every day. Biologics play a critical role in the treatment of many serious illnesses, including rare genetic disorders, autoimmune diseases, and cancer and they often offer the only effective or available treatment option. They’ve become such a mainstay of modern medicine that they currently account for about a third of new drugs approved by the FDA. While these products offer therapeutic promise, they often come at great expense. Biologics represent almost 40 percent of all prescription drug spending and have played a large role in rising drug prices, accounting for 70 percent of the growth in drug spending from 2010 to 2015, according to a RAND study.
Congress responded to these pricing trends by creating the Biologics Price Competition and Innovation Act of 2009 (BPCIA), which established an abbreviated pathway for approval of certain biologics, called biosimilar and interchangeable products, once any exclusivity periods for the reference product have lapsed.
While the U.S. market for biosimilars is still maturing, FDA research suggests that after market entry, biosimilars have the potential to offer significant savings. This is especially true after two or more biosimilars are approved and on the market.
As of today, the FDA has approved 12 products under BPCIA authority, including the first biosimilars for cancer in 2017. But, thus far biosimilars have failed to gain widespread traction - only a fraction of the biosimilars approved by the FDA have launched so far. In fact, FDA-approved biosimilars face many obstacles in the marketplace in addition to uncertainty by health care prescribers to prescribe a newer type of medication.
Now we all know that it took a long time for providers to grow comfortable prescribing generics and for patients to be confident in taking them. It took a long time for the generics industry to work through some of the legal tactics that were used to stymie competition. And it took a long time for the coverage systems to be changed to take brisk advantage of generic entry. We recognize that the generic and biosimilar programs are different and that biosimilar manufacturers confront different development challenges. And yet it is striking that we appear to be falling into some of the same doubts and policy constraints that were used to deter competition from generics in the years after the Hatch Waxman Act.
We don’t want history to repeat itself. If we’re not able, or willing, to support the development of this market and pursue policies and practices that encourage sponsors to invest in biosimilars by enhancing regulatory predictability and encouraging market acceptance of these products, then the resulting competition that Congress intended and that patients need, will be derailed.
That’s why in July Dr. Gottlieb announced our four-part Biosimilars Action Plan to accelerate biosimilar competition, applying many of the lessons learned from our experience with generic drugs. This is a forward-looking plan reflecting a maturing program. With almost 70 development programs for proposed biosimilars to 31 different reference products, we are laying the groundwork for achieving a robust program in the coming years.
The first prong of our plan is to improve the efficiency of the biosimilar and interchangeable product development and approval process. Just as we’re doing with our generics program, we will create standardized review templates to improve review efficiency. We intend to create an office of therapeutic biologics and biosimilars and improving coordination with different review divisions. Our scientists are also looking at tools and information resources that might allow development programs to be more efficient and to potentially reduce the size, and potentially the cost, of clinical studies. This includes developing biomarkers for evaluating pharmacokinetic and pharmacodynamic response and creating an index of critical quality attributes for use in comparing proposed biosimilars to certain reference products. Listing quality attributes will allow sponsors to better understand how the FDA evaluates data from comparative analytical studies.
The second prong of our plan is providing scientific and regulatory clarity. The FDA has already issued [six final and four draft] guidance documents related to the development and approval of biosimilars and interchangeable products including the recently issued guidance on labeling to help health care practitioners make informed prescribing decisions for their patients.
Additional final or draft guidance is coming on such topics as reference product exclusivity, statistical approaches to evaluate analytical data, and post-approval manufacturing changes and guidance addressing those cases when a biosimilar manufacturer seeks approval for some but not all indications of a branded drug because, for example, some indications still have patent protections.
We’re also actively exploring data sharing agreements with regulators in Europe, Japan, and Canada and whether, in some circumstances, this could facilitate the increased use of non-U.S.-licensed comparator products in certain studies to support an application under Section 351(k). Using non-U.S.-licensed comparator products for certain studies may lower the cost of clinical studies and facilitate global development programs for biosimilar products.
I know many have been looking forward to our final guidance on interchangeability. We do intend to meet the BsUFA goal of finalizing that guidance by next May, but let me assure you that sponsors don’t need to wait until then to consult with us on their interchangeable development programs.
The third prong of our plan is to develop effective communications to improve understanding of biosimilars among patients, providers, and payors. Education is crucial for adoption and there are still gaps in knowledge. We’re working on developing effective stakeholder communications and we will continue to build on the momentum created with the education and outreach campaign we launched last October - with additional materials for providers and patients, webinars and other materials - and we know you are hard at work on education and outreach as well.
The final prong of our plan is a familiar one - supporting market competition by reducing gaming of FDA requirements or other attempts to unfairly delay market competition by follow-on products. As with generics, companies report having trouble getting samples to conduct analytical studies and clinical trials to meet the FDA’s approval standards for biosimilars. The higher costs, and longer timelines, required to develop biosimilars relative to generics means that these delaying tactics can make it uneconomical for biosimilar sponsors and can postpone entry for extended periods of time.
The FDA is also worried that biosimilar manufacturers may pull out of these endeavors altogether if the brand drug makers are able to lock up markets. I know that many of you attended the Part 15 meeting yesterday where we heard recommendations from the public on how to address some of these issues. We are looking forward to considering the public feedback from that meeting as we continue to develop our policies and plans for biosimilars.
Before I conclude, I’d like to touch briefly on two other issues of interest to your industry - opioids and patient access to medically necessary generic drugs.
The opioid epidemic is responsible for more than 600,000 deaths over the last decade and is killing more than 115 Americans every day. The FDA has taken significant steps to reduce the risk of opioid addiction and death, including requiring generic and branded sponsors of extended-release and long-acting opioids to make education available to prescribers. And for the first time, this requirement is being expanded to immediate-release formulations. We’re also using our active drug safety surveillance resources to explore how we can create benchmarks for more rational opioid prescribing through product labeling or REMS. Together, with the application of modern tools, we believe it’s possible to work with prescribers to create rational opioid prescribing standards for acute pain that can lower the risk of opioid addiction and drug diversion, while keeping these powerful medicines available for patients with severe pain, like metastatic cancer.
In addition, we’re doing what we can to encourage the development of opioids that are harder to manipulate and abuse. While not abuse-proof, these formulations can make certain types of abuse, such as crushing a tablet to snort or dissolving a capsule to inject more difficult or less rewarding. Several abuse-deterrent products have been approved, but their uptake has been slow in part because they are only available as more expensive, brand-name products, many of which are not covered by payers. Last year we issued a final guidance to assist industry in the development of generic versions of approved abuse deterrent formulations and in July we posted three revised product-specific guidances.
PATIENT ACCESS TO MEDICALLY NECESSARY DRUGS
Shortages of medically necessary medications greatly impact patient treatment options and require practitioners to make difficult decisions that can compromise care, such as rationing supplies or using less desirable, but more readily available, alternative therapies. Although the number of new drug shortages has decreased significantly since 2011, we continue to see shortages of medically necessary drugs and are working hard to mitigate these occurrences.
By law, manufacturers of specific drugs must notify the FDA of certain disruptions, so that we can take actions to help avert impending shortages or lessen their impact. Unfortunately, we’re still not getting enough information for us to more effectively take action to prevent or mitigate every drug shortage.
To address these challenges in July we announced the formation of a new Drug Shortages Task Force, including senior leaders from the FDA; the Centers for Medicare and Medicaid Services, (CMS); the Department of Veteran Affairs; and the Department of Defense. This Task Force will explore the reasons behind drug shortages and consider possible solutions. In addition to evaluating the FDA’s current authorities, the Task Force will evaluate the reimbursement policies of CMS and other payors that could be making it difficult for companies to manufacture certain drugs profitably. The FDA is also exploring ways to receive more timely information about potential supply disruptions. We intend to engage the public and hold a meeting with stakeholders in the next several months to provide an opportunity for everyone with an interest in addressing drug shortages to come to the table.
We know that the proximal cause of many drug shortages are quality issues such as substandard manufacturing facilities or processes. Many shortages could be prevented by better and more proactive behavior on the part of manufacturers. Anticipation, foresight and communication are keys to preventing and reducing the impact of shortages. When a manufacturer has a contingency plan in place and provides the FDA with advance notification before production is halted or put on hold, shortages can be more easily mitigated.
Without such efforts, shortages are more likely to occur and could take longer to ameliorate.
That brings me back to where I began. Today I’ve repeatedly used the word access in talking about medicines. I want to assure you that like all of you, FDA never forgets that behind that abstract word are patients who are struggling to pay for their medications because the cost is too high, who skip a dose to save money or who may not be able to afford the treatment at all. Similarly, patients are often ultimately the ones effected by a drug shortage. As part of our mission to protect and promote the public health, the FDA is committed to do what it can to address the access issues posed by drug shortages and the indirect costs that affect drug prices where we have a role to play.
In the long term, the best solution is to have multiple FDA-approved and marketed versions of each drug. Just as we rely on industry to partner with us on drug shortages, industry must shoulder some of the responsibility for improving access to more generic and biosimilar drugs. They can best do that by improving both the quality of their submissions and the quality of their facilities. Both factors are reflected in the still high rate of ANDAs that are receiving a Refuse to Receive and the multiple approval cycles for generic drugs. When only 9 percent of the ANDAs are approved on the first cycle, that ultimately has an impact on the extent to which we can approve more generic applications.
As I’ve said, FDA’s primary and overriding objective is to encourage innovation and competition, whether we’re confronting a sole-source medically important drug with access issues or an expensive biologic to treat cancer. But we can’t do it alone. We need industry to do its part. Together we can be sure that high quality, affordable medicines are available to patients.