Drug prices: FDA considers encouraging generics

The FDA head says he is looking into what we can do to encourage competition from generics:


A few nuggets I found that I thought were of interest:

The first generic drug that hits the market will “only slightly lower” the price compared to the brand, according to an FDA analysis. A second generic competitor approved will slash the price to almost half that of the brand version while subsequent approvals will drop the cost to 20 percent of the brand.

The action on generic drugs would be a shift from the agency’s current stance. Presently, the FDA prioritizes applications for the first company to apply for a generic version of a brand-name product. The agency hasn’t typically considered drug costs as a major policy, and is barred from taking them into account when deciding whether to approve a new drug.

[…] The agency is also looking at a plan to eliminate within a year the backlog of 2,640 generic-drug applications, Gottlieb said.

It is quite interesting to find out that you need several generic drugs to lower prices significantly. I had not realized it – but, retrospectively, looking at it from the point of view of game theory it makes total sense.

I had no idea that the FDA is not allowed to look at price. Good to see they are now looking at ways to improve the generics pipeline. I am not sure if insulin analogues are considered generics, since they are biologicals though: very complex organic molecules.