Bottlenecking Generics

You’d think that if someone seriously wanted to reduce health care costs in the U.S., he would want to streamline the approval process for generic drugs.

Just the opposite seems to have occurred.

Whereas five years ago the FDA typically approved a new generic drug within 16 months of the manufacturer’s application, the typical delay is now more than 26 months. The budget for the FDA’s generics office is only $51 million for 2010: up from 2009, but still clearly insufficient to meet the need. It’s hard to think of many ways that an additional $30 million or so could be invested with better near-term payoff on the nation’s collective medical bill.

Executives at a generics meeting joked that the government spends less on reviewing applications for new generic drugs than the New York Yankees spend on the payroll for the left side of their infield.

5 thoughts on “Bottlenecking Generics”

  1. But the Yankees receive real value for that expenditure. The FDA gets very little bang for its buck. Because generics are supposed to be chemically identical, the evaluation should focus on manufacturing differences that may create problems with the final product. But they spend their time on non-value added activity. The system is, as is most government regulation, designed to protect the current players at the expense of the upstart competition.

  2. DHL..whatever it is they’re doing takes time and uses human resources…even if the approval process involves dancing to ancient Celtic tunes around large bonfires during the full moon, then as long as it’s required, the overall healthcare cost level will benefit from doing more of it.

    But are you sure that the current process in fact ignores manufacturing techniques?

  3. the problem is that the FDA does not have the objective of improving the cost or quality of helth care. Their role is to protect us from the evil pharmas who, since they have a profit motive, would just as soon kill us with rat poison as cure us … or such is the mindset of the Washington regulator.

    Change the pay structure of the FDA folks – make 30% of their compensation incentive based – and have that bonus be driven by both the quality of the drugs they approve and the speed with which they are approved and I suspect the process would change in a big hurry.

    As it now stands, the regulators have everything to lose if they let a bad drug through, but nothing to gain by having a good drug on the market sooner.

  4. More or less time in the approval queue sometimes doesn’t matter. According to the article, some generic manufacturers apply for approval prior to expiration of patent protection. So long as the application is approved prior to expiration and manufacture can get spun up so that a good supply is on hand as soon as protection has ended, delay is not really that important an issue for the consumer and for 3rd party payers.

    What is important is that the FDA does not prioritize their applications based on criticality. I think that they’re doing first in/first out which sacrifices value to the public in exchange for minimizing the opportunity for the FDA to play favorites.

    The solution proposed is to hire 50 more reviewers. They had their budget upped by 10M. Do reviewers really cost more than $200,000 in compensation and equipment per year?

  5. It takes over 2 yrs to approve a generic drug and the FDA still screws up. Dr Obama was wrong. Not all generics are the same as the drug they claim to copy. Here is a list of generics that either don’t work or are just plain dangerous. The FDA needs to be reformed and rededicated, Stalin style. We need some show trials and some public confessions like Tiger made. We need to put the FDA in rehab.

    Obama’s just the kid of guy who will do this.


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