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Historical Impacts of Generic Drug Regulation

Monday, July 24, 2017  
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Student Submission - Historical Impacts of Generic Drug Regulation

By: Stephanie Liu, PharmD Candidate 2017
Preceptor: Bic Nguyen, PharmD, MPH, BCPS
Philadelphia College of Pharmacy

Generic drugs have saved patients billions of dollars in pharmacies. According to the GPHA 2016 Generic Drug Savings and Access Report in the United States, the annual generic drug savings was 227 billion dollars in 2015.1 It is important to understand that generic drugs may enter the market once the exclusivity for a brand medication expires. It was estimated in 2015 that there was a 66% monthly price reduction after the loss of exclusivity for a brand medication.2 In order to keep pharmacy a viable business, community pharmacies use generic medications to hit higher profit margins. Medicare/Medicaid also plays a large role in these savings with the use of generic medications in their formularies.3 When a generic medication becomes available, Medicare replaces the original brand medication by placing generic drugs in lower tiers of their formulary.3 Lower tiers tend to be cheaper for the patient in terms of co-pays and out of pocket expenses. This method not only saves money for the patient and pharmacy money, but also for the government through government-sponsored medication plans (e.g. Medicare Part D) by covering cheaper generic bioequivalent counterparts. While generic medications save money for the public and promotes commerce, it is often a misconception that a generic drug is less effective than its brand. Generic drugs are required to prove bioequivalence to the Food and Drug Administration (FDA) before making it onto the market. The objective of this article is to educate healthcare providers on generic drugs. It will discuss the historical impacts of the regulatory process for generic drugs, generic medications comparatively to new drugs, resources available to healthcare providers, and counseling points to pharmacists on this topic.

On July 9th, 2012 the Generic Drug User Fee Amendment (GDUFA) was signed into law and changed the course of generic drug approval.4 Prior to GDUFA, the FDA was understaffed and underfunded in the Office of Generic Drugs (OGD).4 This resulted in a significant backlog of generic drug applications, known as abbreviated new drug applications (ANDA).4 There was also no required deadline to review the industry-submitted generic drug applications from the OGD causing a substantial delay in new generics hitting the market. 4 In response, GDUFA was created based on an agreement negotiated by the FDA and representatives of the generic drug companies to require the ANDA applicant to pay a user fee upon submission of a generic drug application.4 These user fees help fund FDA’s generic program to ensure generic drug applications are reviewed in a timely manner by placing a review and action deadline of 30 months on all ANDAs submitted to the OGD.4 GDUFA is a 5-year program and has been reauthorized to continue past 2017 as GDUFA II.5 A few adjustments have been made to the GDUFA II including increased funding with annual program fees, elimination of prior approval supplement charges, and small business considerations. 5 Bottom line, GDUFA has fostered a faster, more reliable generic drug approval process.

A new medication requesting FDA approval requires preclinical, clinical, and post-marketing studies.6 The “abbreviated” drug application used for generic medications does not require preclinical or clinical (phase 1-3) evidence like brand drugs since the safety and efficacy profile of the medication in humans was previously established with the original molecule.6 Due to the more extensive research and evidence developed for the brand drug application, the exclusivity for a new chemical entity, also known as new drug, is about 5 years.6 Alternatively, generic drugs need to prove bioequivalence to the original molecule and good manufacturing practices. The ANDA must include evidence and documentation to support labeling, bioequivalence, quality overall including chemistry, manufacturing, and controls, as well as microbiology.7 Similar to new drugs, the first generic medication has 180 days of exclusivity with FDA approval. 8 So the first generic that enters the market has 6 months along with the brand medication to produce revenue before another generic can be approved.8 Additional studies including pediatric studies may contribute to longer exclusivity.6 Overall, the exclusivity of a brand new medication and its first generic contributes greatly to the prolonged availability of multiple generic medications, competition on the market, and affordability to patients.

New generic medications are constantly getting FDA-approval and attention on the market. A good way to find out more about first generics and when they hit the market is to utilize the FDA website. The first generic drug approvals are listed annually on the FDA website.9 Another resource is Drugs@FDA which can be used to learn more about drug approvals for both brand and generic medications.10 Drugs@FDA releases drug approval reports by the month they are approved.10 Orange Book, also known as Approved Drug Products with Therapeutic Equivalence Evaluations, is a portable reference which identifies generic medications that are approved for safety and efficacy by the FDA.11 The Orange Book is also mobile friendly with an app available in the AppStore and Google Play.11 All of these resources are free and available to everyone.9-11 

Correcting the misconception patients have on generic medication is crucial for economic savings in addition to improving medication adherence and compliance. Since generic drugs are less expensive, some patients may often assume that generic drugs are less effective and not safe. Medical providers should educate the patient and inform them that generic drugs have the same active ingredient and deliver an identical amount of the active drug to the patient as brand medications.7 It is important to understand that substantial evidence is provided on a generic drug before it hits the market to prove its bioequivalence to the brand preparation.7 In addition, the OGD reviews multiple safety measures including labeling, chemistry, manufacturing, and microbiology to ensure high quality generic medications are provided on a consistent basis.7



1.       Generic Pharmaceutical Association. GPHA 2016 Generic drug savings and access report in the United States. Accessed March 10, 2017.

2.       Drug Store News. Generic Drug Report 2016. Accessed March 10, 2017.

3.       Levinson D. Generic Drug Utilization in the Medicare Part D Program. Department of Health and Human Services. 2007. Accessed March 9, 2017.


4.       U.S. Food & Drug Administration/Center for Drug Evaluation and Research web site. Overview of the Generic Drug User Fee Amendments of 2012 (GDUFA): Small Business and Industry Assistance. Accessed March 9, 2017.


5.       U.S. Food & Drug Administration/Center for Drug Evaluation and Research web site. GDUFA II Fee Structure Summary. Accessed March 9, 2017.


6.       U.S. Food & Drug Administration/Center for Drug Evaluation and Research. The FDA's Drug Review Process: Ensuring Drugs Are Safe and Effective. Accessed March 9, 2017.

7.       U.S. Food & Drug Administration/Center for Drug Evaluation and Research. Guidance for Industry ANDA Submissions — Content and Format of Abbreviated New Drug Applications. Accessed March 9, 2017.

8.       U.S Food & Drug Administration/Center for Drug Evaluation and Research. Guidance for Industry 180-Day Generic Drug Exclusivity Under the Hatch-Waxman Amendments to the Federal Food, Drug, and Cosmetic Act. Accessed March 9, 2017.

9.       U.S. Food & Drug Administration/Center for Drug Evaluation and Research. First Generic Drug Approvals. Accessed March 9, 2017.

10.   U.S. Food & Drug Administration/Center for Drug Evaluation and Research. Drugs@FDA. Accessed March 9, 2017.

11. U.S. Food & Drug Administration/Center for Drug Evaluation and Research. Orange Book: Approved Drug Products with Therapeutic Equivalence Evaluations. Accessed Mach 9, 2017.

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