- Speech by
Robert M. Califf, M.D., MACC
(Remarks as prepared for delivery)
Thank you, Linda [Horner]. I’m delighted that the USPTO and the FDA are collaborating on this joint listening session, as well as in other ways.
I want to express my gratitude to all those employees from both agencies who I know have been working for many months to lay the groundwork and prepare for today’s meeting. These meetings involve a lot of preparation. So, thank you.
I also want to thank the many product developers, representatives of industry, academia, and consumer organizations, as well as the patient advocates and other stakeholders who are participating today, and for your continuing involvement on these issues.
As President Biden recognized in his 2021 Executive Order on Promoting Competition, our two agencies have distinct authorities and missions. In a number of key areas, however, when it comes to efforts to make essential prescription drugs more affordable and accessible to the patients who need them, we have some important overlapping and complementary interests and responsibilities.
That’s why, since the issuance of this Executive Order, FDA and USPTO have been working together to leverage our combined expertise. For instance, we’ve begun inter-agency cross training to help strengthen our understanding of our respective responsibilities and how we can work together. Today’s public listening session is the latest chapter in this continuing effort, designed specifically to provide stakeholders with the opportunity to speak with both agencies at the same time about these vital issues.
As a public health agency, the FDA has the responsibility to use the best available science to review new medical products to determine whether they are safe and effective for specific indications so that the balance of risks and benefits for use for those indications makes them suitable for marketing. But there is another important related, though perhaps less well known aspect of our work. That is to encourage the scientific research and development during the long course from concept to determination of approvability to help ensure they are translated into meaningful products that can make a difference for patients. This responsibility extends for the entire product life cycle, well-beyond the patent life.
To this end, the FDA has a number of robust programs to advance the development, approval and marketing of high-quality generics and biosimilars. For instance, the Science and Research program established under the Generic Drug User Fee Amendments (or GDUFA) helps us provide product-specific guidance to support generic drug development.
Likewise, FDA has initiated a regulatory science program pilot under the Biosimilar User Fee Act (or BsUFA) that focuses on advancing the development of interchangeable biosimilar products and improving the efficiency of biosimilar product development. Both programs also have mechanisms for FDA to communicate with applicants early in the process to help clarify regulatory expectations for prospective applicants. These early communications help make product review more efficient by proactively addressing emerging scientific and regulatory issues and thereby reduce a generic drug or biosimilar product’s time in the pipeline from concept to development to market.
We’re also focused on supporting the development of complex generic drugs, such as products with complex active ingredients or drug-device combination products. These products are critical to the treatment of many medical conditions, but because they can be more scientifically challenging, time consuming, and expensive to develop, they often lack adequate generic competition. In addition, there can be greater uncertainty concerning the approval pathway or questions on issues such as proposed study designs or possible alternative approaches.
We know the importance that Americans place on affordable prescription drugs. Generic drugs today represent nine out of ten (90 percent) of all prescriptions that are filled. What this means is that more patients have greater access to affordable, safe, effective, and high-quality medicines. And that patient access continues to be a priority for the FDA. While our agency doesn’t play a direct role in drug pricing, we can -- by encouraging development of generic and biosimilar products – support increased competition in the health care market. This can have a transformative impact by improving affordability and increasing access to these essential medicines.
On a personal level, I’m certainly glad I can get important medications I need for things like blood pressure in generic form; I think it’s a fair deal to have access to low-cost versions of these medicines after a defined period of protection. And that’s the crux of the matter. Our laws and regulations provide drug developers with protection from competition for a specific period of time. The reason for this is that these companies do necessary and important research in support of the development of essential and often life-saving treatments. Consequently, they should be allowed to recoup and benefit from their investments. That code of fairness is why these principles were written into law.
At the same time, however, delay in competition must have limits and involve a balance between innovation and access. The just rewards that come with investment in R and D must be balanced with legal and regulatory pathways that allow for and encourage generic drug and biosimilar product manufacturers to enter the market. This helps increase competition and drive down prices, thereby making these essential drugs more accessible and affordable and lowering health care costs. Moreover, by enabling a path for competition, we provide developers and innovators with added incentive to invest in further research that will lead to the discovery of new drugs that can deliver additional benefits for patients.
As you probably are aware, there are significant savings to consumers from this kind of competition. In 2022, the FDA estimated the cost savings from new generic approvals from 2018 to 2020 amounted to $53.3 billion a year. It’s worth noting that first-generic approvals accounted for about one third (or 29%) of the total savings. First generics are especially important because they are the first approval by the FDA that permits an application holder to market a generic drug product in the United States.
While this system is sensible and straightforward, the road to competition requires sponsors to navigate both the drug approval process and intellectual property issues before generic and biosimilar products can be brought to market. For example, under the Hatch-Waxman law, many first generics only obtain final approval after they have challenged a patent listed in the Orange Book for the brand product, based on the generic applicant’s opinion that the patent is invalid, unenforceable, or will not be infringed by the generic product.
Unfortunately, we also have seen gaming tactics by some brand companies who attempt to impede or undercut competition from generics and biosimilars. We’ve put in place multiple comprehensive initiatives – many of which are outlined in the Drug Competition Action Plan (or DCAP) and the Biosimilars Action Plan (or BAP) -- aimed at reducing this so-called “gaming” of FDA regulations that attempts to extend brand monopolies beyond what Congress intended with Hatch-Waxman and unfairly delay market competition.
These plans also include policies that improve the efficiency of the FDA’s review of marketing applications for generics, biosimilar and interchangeable products, increase scientific clarity and regulatory certainty for manufacturers and other stakeholders, and help educate stakeholders about interchangeable products.
The objective of our two agency’s collaboration under the Executive Order is to ensure the patent system is not used in ways that unjustifiably delay generic drugs and biosimilar competition beyond that reasonably contemplated by law.
While FDA only has a ministerial role when it comes to patents and their listing in the Orange and Purple books, collaboration between our agencies remains important. We are committed to working with PTO on the initiatives and topics outlined in our exchange of letters, as well as to working with other federal partners like the Federal Trade Commissions to advance competition and ensure enforcement of the laws.
There’s one other important point I think worth noting. That is the potential problem of prices being driven too low to give manufacturers incentives to continue to produce drugs for certain markets.
We know, for instance, that when more than 95 percent of the market for a particular product is filled with generics, that saturation can result in manufacturers leaving the market. This is not an issue related to patent law, as these products typically have been off-patent for a long time. But what it makes clear is that the problem of access to affordable medications in the marketplace will not be solved simply by encouraging and introducing competition; it must also include consideration of other issues, including how to provide incentives for manufacturers to continue to supply less profitable off-patent drugs in the long term. We need to ensure that market competition and the resilience of the supply chain are promoted and sustained even after generics and biosimilars enter the market.
The USPTO and the FDA will continue to collaborate in the development of policies aimed at protecting and promoting U.S. innovation, advancing competition, and lowering prescription drug prices for all Americans. We must achieve the appropriate balance that encourages meaningful innovation in drug development while not unduly delaying competition that provides relief from the high cost of medicines.
I want to thank you again for your engagement, and we look forward to your comments and questions today and going forward.