How the FDA Plans To Lower Your Drug Costs

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The Food and Drug Administration hopes that streamlining the approval process for generic drugs will lower drug costs for millions of Americans.

"The fact is that too many people can’t afford the medicines that they need,” said FDA commissioner Scott Gottlieb, M.D., in his opening remarks at Tuesday's public meeting, which was held to get feedback on their new proposals.

While the FDA doesn’t have a direct role in how drugs are priced, notes Gottlieb, he has proposed what he's named the Drug Competition Action Plan, in the hopes of driving down costs by increasing choices for consumers.

Rising drug costs are a continuing problem for consumers. About one-quarter of Americans who regularly take a drug saw their costs increase in the last 12 months, according to a recent Consumer Reports nationally representative survey.

And previous research revealed that such increases can mean people forgo paying other household bills, or simply don't fill their prescriptions because they can't afford them.

Because of this, Consumers Union, the policy and mobilzation arm of Consumer Reports, has supported the FDA's efforts to approve generic drug applications more quickly. Other drug policy experts agree.

"These steps really could have an impact on reducing the price that consumers pay for their prescription drugs,” says Stephen Schondelmeyer, Pharm.D., Ph.D., chair of the department of pharmaceutical care and health systems at the University of Minnesota College of Pharmacy.

That means that consumers could soon be paying much less for generic versions of brand-name drugs, such as the erectile dysfunction drug Viagra or the diabetes medication Byetta. Both are approaching the end of their patent protection.

Here, what you need to know now about key components of the FDA's proposal.

Approving Generic Drugs Faster

The FDA wants to make it easier and faster for generic drugs to get approved. The agency says drugmakers usually have their generic drug application kicked back an average of four times.

"That’s highly inefficient," says Gottlieb as “it entails a great deal of re-work by FDA and industry alike."

Gottlieb instead proposes strengthening communication with companies before they submit applications with a goal of “getting it right the first time,” he says.

A couple of years ago, the FDA faced a massive backlog of generic drug applications; it was taking the agency a whopping 47 months on average to review them. But by last year, the agency had whittled the time from application to decision to 15 months.

This new proposal outlines steps to cut that review time even more, to 10 months. Further, the agency wants to prioritize review for drugs with fewer than 3 generics on the market, promising to move those applications through the process in only 8 months.

Competition from multiple generics can dramatically drop the price of a drug. For example, when the first generic of the popular cholesterol-lowering drug Crestor hit the market in the spring 2016, it was priced at around $200 for a 30-day supply.

Since then, at least 17 other drugmakers applied and won FDA approval to make the generic version of Crestor. Today, the price is around $20 for a month's supply, according to figures from GoodRx, a company that tracks drug prices and offers consumers discounts on medications.

In the case of a blockbuster drug such as Crestor, generic makers are typically waiting in line when the patent is about to expire so they can jump in with a lower-cost version. But that may not be the case for certain brand-name drugs, when the drug is for a rare condition or used in smaller groups of patients. So, the drug remains costly because there is no competition.

To address that issue, the FDA is also encouraging companies to step up and make more generics. Earlier this summer, the agency published a list of 267 drugs for which no generics exist but are eligible for generic applications.

The benefit of that move is less certain, especially for drugs that are not widely used, says Schondelmeyer.

“In situations where you have a small market for a drug, there is little incentive for generic manufacturers to step in,” he says. “That’s a tougher problem to solve.”

Getting Brand Name Drugmakers to Play Fair

Companies that make brand-name drugs sometimes work behind the scenes to delay competition from a generic drug company as long as possible.  

For example, generic makers need to buy up to 3,000 doses of the brand-name products to develop and test their generics. But makers of the branded drug can prevent generic companies from getting the doses they need to do testing.

In other cases, he says, brand-name drug makers raise "scientific objections with us that are timed to maximize the potential for delaying the approval of a generic drug."

"This sort of gaming is wrong," says Gottlieb. "It undermines the careful balance Congress struck between access and innovation."

One of the main reasons for the public meeting, says Gottlieb, is to learn more about how branded companies are abusing the system.

“We’re looking for places where this sort of gaming is happening, and we will change our rules where we can, to make sure the competition that Congress envisioned is taking place,” he says.

Encouraging Generic Competition for “Complex” Drugs

One reason that certain types of prescriptions, such as eye drops or ointments, are so expensive is that it can be difficult to prove that the generic works the same way as the original, notes Schondelmeyer. The same is true for complex drugs, such as insulin, derived from living cells and tissues rather than being chemically synthesized in a lab.

"In many cases, the traditional requirements used to demonstrate sameness may not be appropriate when it comes to complex drugs,” says the FDA's Gottlieb.

To address that problem, the FDA plans to revise regulations to make it easier for companies developing these more complex generics to prove that they are equivalent to the branded drug.

Lisa McGiffert, director of Consumer Reports’ Safe Patient Project says this part of the proposal sounds very good in theory, though consumer watchdog groups need to monitor the process. Says McGiffert, "We have to be vigilant in ensuring that safety is not compromised in pursuit of efficiency."

Editor's Note: This article and related materials are made possible by a grant from the state Attorney General Consumer and Prescriber Education Grant Program, which is funded by the multistate settlement of consumer-fraud claims regarding the marketing of the prescription drug Neurontin (gabapentin).

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