The Federal Trade Commission is expected to release a comprehensive study on the competitive impact of authorized generic drugs in early 2010, while a new report concludes these versions of drugs expand patient access.
Authorized generics are forms of drugs which are identical to their branded equivalent in both active and inactive ingredients, as opposed to merely having identical active ingredients, as is the case with normal generics.
The FTC’s interim report, released in June 2009, found branded generic drugs lower prices for consumers 4-6 percent. A report from Howrey LLP, “The Short and Long Term Competitive Impact of Authorized Generics,” commissioned by the Pharmaceutical Research and Manufacturers of America (PhRMA) and released in October 2009, found an increase of close to 5 percent in generic prescriptions filled when an authorized generic was marketed.
“Eliminating authorized generics would benefit some competitors but would cause large, measurable consumer harm,” the Howrey study found. “The $880 million in consumer savings, supported by the FTC’s analysis, far outweigh any potential anticompetitive foreclosure effects in the narrow sliver of markets in which such harm is even plausible as a theoretical matter.”
Consumers Benefit
William Kennally, Pfizer’s regional president of established products for North America, believes consumers benefit from the availability of authorized generics.
“We feel we’re increasing access through channels other non-branded generics don’t find as profitable, such as mail order,” Kennally said. “There’s more patient adherence; you’re taking essentially the same product and offering it at a more affordable price, and patients have confidence in and respect for the brand historically.
“These points work together to support greater access for patients,” Kennally concluded.
Pfizer has a large stake in ensuring protection of authorized generics. Greenstone, a wholly owned subsidiary of the firm, launched 30 abbreviated new drug products—drugs that are the proven bioequivalent of their branded counterparts but are subject to lower testing thresholds—over the past year under the authorized generic model.
Acquired by Pfizer in April 2003, Greenstone is expected to fill demand for less expensive copies of more expensive drugs, a market expected to expand over the coming years as drug patents worth billions in annual sales begin to expire.
Early 2010 Ruling Expected
Observers believe the FTC will rule on the matter in early 2010, and Pfizer expects supporters of authorized generics will be able to make their case convincingly for both regulators and politicians.
“The current bills in the House and Senate have been dormant, and we have been concerned they would be attached to the health reform packages,” said Kennally. “With all of the data value we have for the benefit to the consumer of authorized generics, we are confident our case is pro-consumer and pro-patient.”
Ben Domenech ([email protected]) is managing editor of Health Care News.
Additional Info
“Howrey Report: The Short and Long Term Competitive Impact of Authorized Generics,” October 2009: http://www.heartland.org/healthpolicy-news.org/article/26572
Federal Trade Commission: “Authorized Generics: An Interim Report,” June 2009: http://www.heartland.org/healthpolicy-news.org/article/26571/
Benjamin Domenech is the founder and publisher of The Federalist and a senior fellow at The Heartland Institute.
