Jill Wechsler is Pharmaceutical Technology's Washington Editor, jillwechsler7@gmail.com.

Jill Wechsler

	In highlighting key FDA priorities for the coming months, commissioner Scott Gottlieb told agency advocates in Washington DC that he will continue to seek ways to curb rampant opioid addiction, to promote competition that curbs high drug prices, and to advise on right-to-try legislation that helps patients. An ongoing challenge is to maintain resources across all FDA operations in an “austere budget environment,” particularly for those programs without support from user fees.

	More access to biosimilars is key to bringing down outlays on prescription drugs, and FDA is preparing a “comprehensive plan” to bolster the market for these products, Gottlieb said at a briefing held during the first week of February 2018 in Washington, DC sponsored by the Alliance for a Stronger FDA and the Pew Charitable Trusts. He urged health plans, payers, and supply chain entities to support biosimilar coverage and reimbursement, as opposed to established products offering rebates designed to discourage biosimilar reimbursement. FDA also will propose regulatory action to facilitate approval of interchangeability claims for the new alternative therapies.

	The commissioner reiterated the need for brand manufacturers to stop “gaming” the system by denying access to products needed for bioequivalence testing of generics. FDA is looking for ways to modernize the interpretation of the Hatch-Waxman Act, Gottlieb added, particularly related to combination products where the drug component is off-patent, but the delivery device is not. Market competition also may gain from more ready access to over-the-counter medicines through legislation that modernizes the regulatory framework for these products. And FDA is looking at how medical apps may help individuals select the appropriate over-the-counter (OTC) medicine in the pharmacy based on, say, cholesterol levels or blood pressure.

	A continuing priority for FDA is to reduce the prescribing and distribution of opioids to curb inappropriate use. Now the agency is encouraging new drug packaging methods to reduce opioid exposure in the medical system. FDA recently called on manufacturers of the diarrhea drug loperamide, marketed OTC as Imodium and store brands, to discontinue distribution of large-volume bottles and adopt unit-of-dose blister packs that make it difficult to obtain the quantities of pills needed for crushing to achieve euphoric effects. At an FDA meeting on opioid abuse in late January, FDA called for industry to voluntarily adopt the recommended packaging. It also is asking suppliers of bulk substances and online vendors to “exercise public health judgment” in limiting access to this product. Gottlieb told the Alliance that FDA will look further at whether it has authority to require that all dangerous pain drugs be distributed in blister packs to support more limited prescribing and dispensing.

	A thorny issue for Gottlieb is the Trump administration’s support for Congressional “right-to-try” legislation to facilitate patient access to life-saving experimental therapies. In response to questions, Gottlieb said that FDA continues to provide technical assistance to those crafting proposals on this topic and expressed optimism that Congress will adopt legislation that will “work on behalf of patients.” Dozens of disease and patient groups, including the National Organization for Rare Disorders, are opposing the lead right-to-try measure for fear it will expose desperate patients to unproven, and possibly harmful, test therapies. The legislation does little to address manufacturer supply issues, the main factor limiting expanded access, and it could delay FDA approval of safe and effective new therapies.

	Gottlieb also acknowledged challenges in dealing with government shutdowns and staffing issues. He said that FDA is launching a pilot program to speed up its very slow hiring process. And he recognized that many members of FDA’s leadership team have been on the job a long time and are approaching retirement age, necessitating a focus on succession planning across the agency. “If I could keep Janet Woodcock in her position another 25 years, I would,” Gottlieb quipped, “but I don’t think I’ll be able to do that.”

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Gottlieb promoted the development of biosimilars and safer opioid packaging at a briefing sponsored by Alliance for a Stronger FDA and the Pew Charitable Trusts.

Gottlieb Encourages Biosimilars and Safer Opioid Packaging

	Amidst the continuing clamor for government action to curb prescription drug prices, a more collaborative effort aims to broaden the debate to consider the full range of healthcare services and rates that affect spending in this area. The National Pharmaceutical Council (NPC), a pharma-funded research organization, is partnering with the independent journal 

 to examine the root causes of rising healthcare outlays in the United States. This two-year program will support academic and professional research projects and commentaries to be published and disseminated online by the journal.

	The initiative kicked off formally last week at a Washington, DC conference on healthcare spending. A main topic was the impact of identifying and reducing unnecessary or excess care, a tricky task, as seen in the variety of ideas for curbing health outlays across populations and interest groups. Leading researchers differ on how much unnecessary care drives up overall costs, and the impact of plans and payers denying coverage for expensive new therapies or procedures.

	Mollyann Brodie of the Kaiser Family Foundation pointed out that individual consumers are eager to cut their own healthcare bills, but not national support for health programs. The public assigns high value to the health services they receive and doesn’t agree that the US spends too much on healthcare, as compared to, say, education or infrastructure repair.

	All parties regard this project as an opportunity to move away from “pointing fingers and blame” and toward more constructive strategies. 

 editor-in-chief Alan Weil noted that government officials were talking about the “unsustainable” rise in healthcare spending back in the 1980s, and that recent shifts to paying for value, over volume, have not brought fundamental change. With the nation now spending some $3 trillion a year on healthcare, critical thinking is needed on how well market forces and regulators allocate those resources. Key issues are whether current prices for surgery, hospital stays, drugs, and devices are appropriate or too high; whether healthcare spending is crowding out other social programs such as education, police, and firefighters, or infrastructure repair; and whether the nation can afford new cures for poorly treated diseases.

	NPC Chief Science Officer Robert Dubois acknowledged that the discussion will address drug costs, but hopes the agenda also includes the high savings from generic drugs. Dubois says he will be satisfied if the project generates a richer conversation on the many factors that contribute to high outlays on healthcare and not just that drugs cost too much.

	Meanwhile, employers that pay much of the nation’s healthcare bills are looking to have a greater impact on the system. The recent announcement that Amazon, JP MorganChase, and Berkshire Hathaway are joining together to seek ways to reduce spending on healthcare for their one million employees generated huge excitement for its potential to generate some bold new ideas. Yet, a long history of promising health reform proposals that bear little fruit over the long-run has also generated skepticism and fear that any savings gained by these large corporations will only disadvantage small companies and individuals struggling to find affordable coverage in the market. 

New programs and initiatives by industry examine rising healthcare costs.

Pharma Looks to Change the Healthcare Cost Conversation

	Generic drugs account for nearly 90% of prescription drugs in the United States due to policies that facilitate their development and regulatory approval. Despite this success, generic-drug makers face multiple legal and competitive hurdles to ensuring patient access to less costly, high-quality medicines. Tight profit margins on conventional generics discourage investment in modern manufacturing systems, resulting in contaminated and violative products that lead to recalls and shortages. Price hikes on established products, moreover, have generated a backlash and allegations of collusion and price gouging.
	
	The result is a financial and operational squeeze on the generic-drug industry. Teva Pharmaceuticals is undergoing a major corporate overhaul to address financial difficulties, involving massive layoffs and the shuttering of manufacturing and R&D facilities. Novartis’ Sandoz division says that price pressures may lead to reductions in its US product portfolio and a greater focus on developing biosimilars and complex formulations. 
	Fierce competition between brand and generic-drug makers adds to these difficulties. Most of the nine biosimilars approved by FDA remain off the market due to patent issues. Yet, FDA 

the first generic version of the leading multiple sclerosis therapy Copaxone, and more innovative follow-on drugs are under development (1). 

	A major complaint of generic-drug makers is that pharma companies block access to reference drug samples needed for bioequivalence testing and biosimilar development by abusing restricted distribution programs such as Risk Evaluation and Mitigation Strategies (REMS). The availability of generic medicines “is in jeopardy,” 

asserts the Association for Accessible Medicines

 (AAM), as brands block the purchase of active ingredients and samples; distributor and wholesaler consolidation further squeezes reimbursement; and high costs limit R&D and manufacturing (2). 

	These topics were explored at an FDA public meeting in July 2017, where industry representatives and medical authorities discussed citizen petitions, labeling issues, late formulation changes, and use of REMS to stymie new generic testing. Similar issues were raised at a November 2017 Federal Trade Commission (FTC) workshop on “Understanding Competition in US Prescription Drug Markets.” In opening the meeting, FDA Commissioner Scott Gottlieb emphasized that more streamlined development and approval of generic drugs and biosimilars is key to ensuring consumer access to needed medicines. 

 to “end the shenanigans” that delay the approval of generic competitors and extend a drug’s monopoly beyond intended timeframes (3). To address such hurdles to generic drug entry, FDA published draft guidance to facilitate implementation of single shared REMS programs.   

	Congress is paying attention to these concerns as it seeks strategies for managing drug costs and outlays. At a July 2017 hearing before the House Judiciary Committee, Gottlieb 

 to generic-drug development related to agency initiatives for bringing more generic drugs to market (4). In examining drug pricing issues at a hearing in December 2017, the House Energy & Commerce Health subcommittee discussed proposed legislation to enable generic and biosimilar access to needed brand supplies and other measures to support development of affordable drugs. 

 for bringing complex generic therapies and combination products to market as key to moderating high drug costs (5). Next came an 

 of off-patent, off-exclusivity brand drugs that lack approved generic competition and thus are eligible for expedited review and assistance in developing new versions of these products (6). FDA also published more product-specific guidance documents to help speed approval of complex products, synthetic peptides, and generic versions of opioids with abuse-deterrent features. The agency held several workshops in October 2017 on overcoming barriers to developing complex dosage forms where traditional bioequivalency and bioavailability tests may not support approval, including the use of new quantitative approaches and 

 tests to facilitate product development. Additional advisories aim to encourage development of difficult formulations such as ophthalmic suspensions, gels, inhaled drugs, injectables, and drug-device combinations. FDA is promoting early meetings with manufacturers to discuss innovative product research and review issues. A key topic is how design differences between a generic drug and brand drug may be addressed by demonstrating a limited impact on safety and approving labeling that explains such differences. 

	
	Equally important are FDA efforts to streamline the overall process for evaluating and reviewing all new generics. A sign of success is the approval of more than 1000 new generics in 2017. Much credit goes to the generic drug user fee program (Generic Drug User Fee Amendments, GDUFA), which was established five years ago and recently reauthorized as GDUFA II. The fees have provided additional resources for the Office of Generic Drugs (OGD) in FDA’s Center for Drug Evaluation and Research (CDER) to reduce a huge backlog in unapproved abbreviated new drug applications (ANDAs) and to achieve a more predictable review process. 
	OGD Director Kathleen Uhl 

reported at the AAM fall technical conference

 in November 2017 that the agency was meeting all GDUFA goals for timely review of ANDAs and supplements and for issuing new rules and guidance documents to clarify expectations for testing more complex products and injectables (7). Uhl noted, though, that a continued surge in new ANDAs made it hard to improve operations, and that too many applications with deficiencies lead to many refuse-to-file decisions and multiple review cycles. In January 2018, Commissioner Gottlieb announced additional guidance documents to reduce application deficiencies and changes in internal review practices to streamline the ANDA review process (8). 
	
	FDA also is requiring that all applications include a complete list of relevant manufacturing operations to avoid delays in plant inspections involved in approving a new product. This is particularly important for priority ANDAs that may qualify for a faster eight-month review. But the request to see a full roster of facilities involved in product testing and production two months before ANDA submission has raised an outcry from manufacturers that the timeframe is inoperable and defeats the purpose of the priority review process. 

	The challenge to FDA and industry is to maintain a balance between encouraging the development of important new medical therapies and assuring access to low-cost follow-on medicines. While generic-drug makers complain about innovator firms using patent strategies and supply restrictions to delay competition, bio/pharma companies emphasize the need for incentives to test new therapies and develop added indications to an effective drug; and for labeling to ensure safe and appropriate use of a therapy. So far, there has been limited response to FDA’s list of drugs that lack generic competition, particularly where markets are small and product development is complex and costly. Some gains may come from efforts by regulatory authorities in different regions to harmonize the use of new methods for developing and approving new generics and to adopt common dossiers to facilitate product approvals in multiple markets.

	At the same time, continued pressure on generic-drug prices may reduce product development and limit manufacturing in the US. Numerous state officials have filed lawsuits against generic-drug makers for alleged price-fixing, and debate continues over brand vs. generic product labeling to warn consumers about safety issues. All these trends will shape generic-drug production and costs in the coming months. 

FDA Approves Admelog, the First Short-Acting ‘Follow-On’ Insulin Product to Treat Diabetes

,” Press Release, Dec. 11, 2017.
	2. AAM, “

AAM Calls for FTC Action to Ensure US Supply of Generic Drugs for Patients

,” Press Release, Dec. 8, 2017.
	3. FDA, 

Antitrust Concerns and The FDA Approval Process

FDA Working to Lift Barriers to Generic Drug Competition

List of Off-Patent, Off-Exclusivity Drugs without an Approved Generic

,” AAM Fall Technical Conference, Nov. 6, 2017.
	8. FDA, Statement From FDA Commissioner Scott Gottlieb, MD on New Steps to Facilitate Efficient Generic Drug Review to Enhance Competition, Promote Access And Lower Drug Prices, FDA.gov, Jan.3, 2018.


	Vol. 42, No. 2
	February 2018
	Pages: 14-15

	When referring to this article, please cite it as J. Wechsler, "Opportunities and Obstacles for Generic Drugs," 

Manufacturers tackle regulatory and competitive issues to develop complex therapies and biosimilars.


Opportunities and Obstacles for Generic Drugs

	In his State-of-the-Union address to Congress this week, President Donald Trump continued his harangue about unfair drug prices in the United States, one of his favorite themes. Trump also promised to combat the opioid crisis and to press for a national “right-to-try” law. But even though he bragged about the administration’s success in eliminating the mandate for individuals to obtain health insurance, he surprised many observers by failing to call for full repeal of the Obama administration’s Affordable Care Act (ACA).

	Trump drew strong applause for his pledge to bring down prescription drug costs and ensure that US consumers don’t pay more than those in other countries. It’s “very, very unfair” for drugs to cost more in the US, he said, promising to fix this “injustice” and that “prices will come down substantially.” He linked the issue to his plan for ending the US “era of economic surrender,” characterized by bad trade deals and inadequate protection for American intellectual property.

	These promises to Congress echoed comments the day before at the swearing-in ceremony for new Health and Human Services (HHS) Secretary Alex Azar. Trump advised Azar, who was previously a top executive at Eli Lilly, of the imperative of getting drug prices “way down” and to “unravel the tangled web of special interests” that drive up the cost of medicine. The President noted that other countries pay a “fraction” for the exact same drug, and that “nobody knows that process better than Alex.”

	Yet in a public comment on Trump’s speech to Congress, Azar highlighted the President’s call for a more aggressive approach to combat the opioid crisis, as opposed to drug access and affordability. Azar promised to implement the administration’s strategy for improving treatment, prevention, and recovery services for opioid abusers and to support research on pain and addiction treatments. The new HHS secretary also sent out a message commending FDA’s high rate of drug approvals in 2017, as part of a review of HHS accomplishments.

	While President Trump highlighted the repeal of the ACA’s individual mandate during his first year in office, health policy experts noted that he said nothing about repealing or replacing ObamaCare, a main goal for many Republican legislators. However, eliminating the mandate that encourages young, healthy individuals to purchase coverage is expected to erode the broader state-based exchange system in many markets, as will further defunding and undermining of ACA regulations and programs.  

	Somewhat of a surprise was Trump’s call for Congress to enact legislation designed to provide terminally ill patients with access to promising experimental therapies. Although the many state right-to-try laws offer little additional support for individuals with serious conditions, the White House and Azar may put more pressure on FDA to support such efforts, in addition to granting expedited access and moving quickly to approve new therapies that can demonstrate effectiveness. 

The President described US drug costs as unfair and stated that prices will come down.

Trump Blasts Drug Prices, Sidesteps Health Reform

	Efforts to streamline the development of new medicines, particularly breakthrough therapies, are focusing attention on strategies to clarify and enhance the use of data and information gained over time from process development and validation. This prior knowledge has become more recognized as useful in limiting redundant product testing and informing new drug development. The wide variety in the scope and nature of such data held by biopharma manufacturers is prompting industry to seek more assurance from regulatory authorities that references to prior knowledge in testing protocols and submissions will be accepted and help support regulatory decisions.

	These issues were addressed this week at CASSS CMC Strategy Forum in Washington, DC, building on a workshop in London in November 2017 on prior knowledge and its use in regulatory applications sponsored by the

 (EMA). Participants at the EMA meeting have prepared a report on the value and use of prior knowledge in product and process development, and a white paper on the topic is expected from the organizers of the CASSS Forum.

	The topic is timely because, after 20 years of producing monoclonal antibodies, manufacturers have extensive prior knowledge that can support the assessment of quality attributes, validation of analytical methods, establishment of control strategies, and design of viral clearance and other studies. Quality standards established by the International Council for Harmonisation (ICH) refer to prior knowledge of process and product in establishing relevant testing plans and specifications. Leveraging prior knowledge, explained Josefine Persson, associate director for purification development at Genentech, at the CASSS forum, can lead to smaller validation studies, enhance process understanding, and speed the commercialization process.

	To better use prior knowledge in product development, manufacturers now seek more clarity from regulators on how and where to submit established information in dossiers and to support manufacturing changes through the product lifecycle. Prior knowledge is critical in developing clinically relevant product specifications but has to be documented in a form that is clearly communicated and understood in regulatory filings, pointed out Barbara Rellahan, director of product quality at Amgen.  

	FDA recognizes the value of prior knowledge in designing manufacturing processes, product formulations and control strategies for biologics, noted Cristina Ausin, team leader in the Office of Biotechnology Products in the Center for Drug Evaluation and Research (CDER). She cited the value of utilizing previous experience with similar formulations in developing control strategies and risk assessment, noting that such approaches may lead to faster product development and enhanced manufacturing efficiency. But while prior knowledge can be leveraged to confirm data, it should not override the need to establish controls and specifications that reflect the unique properties of every regulated product or replace the need for extensive product specific knowledge, Ausin said. A concern for FDA, she added, is manufacturer over-reliance on prior knowledge in justifying development strategies; while prior knowledge can support expectations, manufacturers still need data to provide a basic assurance of quality.  

	There’s agreement that regulators will consider leveraging prior knowledge on a case-by-case basis, based on a consideration of product attributes and clinical experience. But manufacturers would like to see more clarity and convergence on where prior knowledge can help eliminate redundant testing and optimize process development. A clear benefit of utilizing prior knowledge is to accelerate development programs for new products that appear to offer important advances for patient treatment. Risk evaluation is key in weighing how much to assess earlier experience with similar products with the need for new product-specific data to support product approvals. 

FDA and industry weigh broader use of prior knowledge in biotechnology testing and production.

Using Prior Knowledge in Biotechnology Testing

	If confirmed as the next secretary of the Department of Health and Human Services (HHS), Alex Azar says that a top priority is to make drugs more affordable. He agreed with members of the Senate Finance Committee at his confirmation hearing on Jan. 9, 2018 that “drug prices are too high,” but noted that the issue is complex and that “there is no silver bullet here.” And he said he would “work with anyone” to create incentives for bringing down list prices.

	Azar disagreed, however, with calls from Democrats for government negotiation of prices for Medicare Part D, noting that private drug plans do very well obtaining discounts and that it would be a mistake to establish a national formulary that is needed for obtaining rebates and discounts. Instead Azar called for changes in Medicare Part B, which does not negotiate and purchases drugs at the set price. In response to a query, he agreed that it might be appropriate for HHS to negotiate purchases of drugs like Naloxone where the government is the direct purchaser.

	Azar’s 10 years as a top executive at Eli Lilly is either valuable experience that would help him understand and deal with regulatory and legislative policies, according to Republicans, or presents a serious conflict of interest in overseeing regulatory and legal policies governing healthcare and pharmaceuticals, as Democrats insist. Finance Committee Chairman Orrin Hatch (R-Utah) said that, instead of automatically disqualifying the nominee, work in the pharmaceutical industry and also in HHS in previous Republican administrations should provide “important insights” in dealing with relevant policies.

	However, Ron Wyden (D-Ore), ranking Democrat on the committee, attacked Azar’s history raising prices at Lilly. Wyden rolled out charts documenting how prices on leading drugs more than doubled in the five years that Azar was president of Lilly USA, and further complained that while Azar chaired the company’s pricing committee, he never lowered prices on any leading product.

	Hatch, who recently announced his retirement from the Senate, drew praise on all sides for stating his determination to gain reauthorization this month for the Children’s Health Insurance Program (CHIP), which has been struggling with short-term fixes that are about to expire. While Democrats support that effort, they voiced serious concerns about Trump administration proposals to undermine what remains of Obamacare through regulatory and administrative actions. Administration calls for welfare reform, opponents maintained, is really a strategy for making “draconian cuts” in budgets for Medicare, Medicaid, social security, and other public health and welfare programs.

	Azar sidestepped specific queries on those issues, but his priority list includes the need to reform Medicare payment policies; to ensure access to quality, affordable healthcare; and to tackle the opioid epidemic. He agreed on the importance of addressing widespread drug misclassification for Medicaid rebate purposes, and supported more value-based contracting for Medicare and for prescription drugs. A goal, he said, is to drive value to ensure that Medicare remains sustainable over the long run. But he also noted that program changes such as Medicaid block grants or reduced eligibility are needed to help slow the rate of growth in public health programs “in the interest of sustainability.”

	Sen. Claire McCaskill (D-Mo) urged Azar to examine last year’s report of the Senate Special Committee on Aging investigation into drug price increases and efforts to expand exclusivities, often involving industry manipulation of loopholes. McCaskill also railed against excessive drug advertising that benefits from taxpayer support through tax deductions. Azar agreed to work with FDA to examine whether its regulatory approach provides sufficient balance in consumer advertising.

	Despite the opposition, Azar is expected to win Senate confirmation fairly quickly, as all parties desire capable leadership for the agency, which Azar is likely to provide. He has pledged to sell drug stocks and to avoid conflicts of interest, and it will be interesting to see if his insider experience leads to new approaches for tackling drug affordability issues.  

Will Alex Azar’s experience in the pharmaceutical industry help or hurt the initiative to keep medications affordable?