FDA eyes changes in method of approving generic drugs FDA begins debate on proposals aimed at halting generic-drug fraud.

July 10, 1991|By New York Times

In a little-noticed move with broad implications for the $40 billion prescription drug industry, the Food and Drug Administration has started a debate on changing the way it approves generic versions of brand-name drugs.

Under one proposal, the maker of a brand-name drug would have to tell the agency more than it now does about what goes into its product. The FDA would publish standards for the ingredients and for testing them.

Years later, when a drug loses patent protection, other drug makers could refer to the publication, called a monograph, to speed FDA approval of a low-priced generic version.

Generic drug makers say they often face years of bureaucratic wrangling over the safety and effectiveness of their products, which mimic long-established drugs.

"Now 10 different FDA chemists review the same thing and come up with 10 different questions," said Harold Snyder, chairman of Biocraft Laboratories, a generic drug maker based in Fair Lawn, N.J.

The leading drug companies have interests on both sides of the issue.

At least two-thirds of generic sales dollars are generated by divisions of brand-name drug makers. But the biggest profits by far are in the brands, which sometimes retain as much as 40 percent of the market even after patents expire.

With much at stake for the companies, the monographs are certain to be debated on legal, economic and public policy grounds.

But spokesmen for industry trade groups -- the Pharmaceutical Manufacturers Association, representing brand-name drug makers, and the Generic Pharmaceutical Industry Association -- said the groups had not yet made up their minds about the issue.

The FDA commissioner, Dr. David A. Kessler, is also proceeding with caution, buying time by naming a committee to study the pros and cons.

RF For one thing, FDA officials are said to disagree over whether the

agency is empowered to require monographs without new legislation, which could open a Pandora's box of industry lobbying.

The proposals, which the FDA published in the Federal Register on May 28, include suggestions by Rep. John D. Dingell, chairman of the oversight subcommittee of the House Energy and Commerce Committee.

Subcommittee investigators found instances of generic drug company employees bribing FDA officials and submitting fraudulent test samples.

The agency said in the Register, "The lack of available information has created problems" for generic drug makers. It said a public monograph system might "streamline" the approval process, "help insure generic drug safety and effectiveness, and increase public confidence in generic drug products."

Even so, Hemant K. Shah, an independent securities analyst in Warren, N.J., said that "monographs would be a disaster for both the brand-name and generic companies."

He added, "If the FDA told the generic companies how to make the drugs, the companies could not say 'my drug is better than the other


Monographs with some information are already published by the United States Pharmacopeia, a private organization based in Rockville, Md.

The Pharmacopeia leaves it up to the drug makers to designate and exclude "trade secrets," said Jerome A. Halperin, executive director of the Pharmacopeia, a drug reference publisher since 1820.

He said the FDA could require expanded versions of the #F Pharmacopeia's descriptions of ingredients and tests, which cover 90 percent of all drugs.

The federal agency already uses monographs to approve antibiotics. The monographs describe the ingredients but do not provide a recipe for putting them together.

Snyder at Biocraft said the FDA formerly had a special unit that approved generic antibiotics speedily, but the unit was abolished and the process "slowed down."

After the fraud scandals, the Generic Pharmaceutical Industry Association last year created a committee that they said was intended to restore public confidence.

The committee rejected the idea of FDA monographs, saying it doubted that the agency's chemists would be competent to produce them.

It suggested an alternative, which the FDA says it is also consid

ering: Several years before the expiration of patents on the largest-selling prescriptions, the FDA would discuss generic versions with interested drug makers.

Later, several generic versions would be approved on the same day, removing an incentive to cut corners

to get lucrative rewards for being first to market.

Arguing against monographs, the generic industry committee said that brand-name drug makers might booby trap the papers by inserting "unnecessarily narrow or restrictive criteria to discourage generic competition."

But Snyder at Biocraft said: "There really aren't many secrets in the drug business. As far as manufacturing goes, if there is a secret, somebody will steal it."

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