The Generic Pharmaceutical Association is seeking an end to the practice of "authorized" generics.

"Authorized generics devalue the 180-day exclusivity period by destroying the incentive for generic companies to challenge patents," GPhA said March 2.

Under an authorized generic deal, a brand company licenses its product to a generic firm for launch at the beginning of another generic's 180-day exclusivity.

During the exclusivity period, a first-to-file generic usually sees significant profits because it is competing only with the higher-priced brand. With an authorized generic on the market, the first filer cannot reap all the benefits of exclusivity because it now must compete with another lower-priced product.

¹ GPhA's statement argues that the practice discourages patent challenges and "could increase consumer costs."

In contrast, Par describes authorized generic deals as "pro-competitive" (see ² Also see "Par Stands By “Authorized” Generics; “More Creative” Deals Coming" - Pink Sheet, 8 March, 2004.).

"Preservation of the 180-day exclusivity incentive remains GPhA's top priority," the association said. "We will continue to oppose efforts that undermine the economic incentive to challenge weak patents."

"We urge the agency to maintain the spirit and intent of the 180-day exclusivity period, which was strengthened in last year's Medicare reform bill."

GPhA issued the statement following an address by FDA Commissioner McClellan at the association's annual meeting in Boca Raton, Fla. McClellan was asked several times about authorized generics.

"Any arrangement that helps bring more generic alternatives to patients faster is likely to be pro-consumer," McClellan said.

"But obviously we will be watching what happens with this new legislation to see how we can implement it to promote consumer benefits and promote access to generic alternatives as quickly as possible."

"I'd like to hear from you all about this issue and any other issues that you think may be obstacles toward the goal of the 180-day period," the commissioner said.

FDA has already heard from one company on the subject: Mylan filed a citizen petition Feb. 17 asking the agency to ban authorized generics from entering the market during another company's 180-day exclusivity.

³ Mylan's petition argues that "FDA has viewed authorized generics as true generics" and should thus prohibit them from coming to market during a first filer's exclusivity period.

Mylan points to a citizen petition in which FDA ruled against the company. In a 2001 response to a Teva petition, the agency concluded Mylan triggered its own exclusivity for nifedipine extended-release ( Procardia XL ) when it began marketing an authorized generic under a deal with Pfizer (⁴ Also see "Mylan Nifedipine Settlement Revised Certification To Paragraph III, FDA Says" - Pink Sheet, 12 February, 2001., p. 31).

"FDA explained its ruling by stating that 'whether Mylan markets the product approved in its ANDA or the product approved is Pfizer's NDA is of little import to the regulatory scheme,'" Mylan's petition states.

The nature of authorized generics means they "should be required to follow an approval process prior to approval," Mylan said. "The licensed product is manufactured by the brand company, but it is packaged with the licensee's label and NDC number."

"Although authorized generics lack the required AB-rating, they are permitted to be marketed in the same manner as an AB-rated generic and therefore are fully substitutable for the brand. Authorized generics are allowed to be marketed as 'generics' for the purposes of pricing and reimbursement/rebate calculations."

Mylan proposes two mechanisms through which FDA could block authorized generics. The agency "could require the authorized generic to submit a one-page application to identify the distributor and manufacturer of the drug," and only tentatively approve the application if another generic is eligible for 180-day exclusivity.

FDA could also require authorized generics to be listed with the agency prior to commercial marketing under regs that require manufacturers to list all drugs in distribution. FDA could then prohibit the authorized generic's entry until expiration of the 180-day marketing exclusivity period.

GPhA Wants “Authorized” Generics Stopped; Will FDA Help?

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