Citing competition as the main driving force, the FDA has refused to interfere with rules pertaining to how generic drugs are sold.
In one action, the FDA denied citizen petitions submitted by generic drug makers Mylan Pharmaceuticals Inc., of Morgantown, W. Va., and Teva Pharmaceuticals USA Inc., of North Wales, Pa., which sought to prohibit the sale of "authorized generic" versions of brand-name products during the 180-day market exclusivity period awarded to the first generic to file for approval after pioneer patents expire.
A loophole in the Hatch-Waxman Act (the law that created the generic drug industry) allows brand-name companies to undermine generics by licensing their innovative products to other companies, which re-label them and sell them as authorized generics, creating competition during the exclusivity period.
"We believe authorized generics are wrong for a lot of reasons," Heather Bresch, Mylan's vice president of government and public affairs, told BioWorld Today. "The congressional intent is clear - exclusive means one - and 180-day market exclusivity means that there should be one generic out there during the 180 days."
But in a prepared statement, the FDA said marketing of authorized generics increases competition, promoting lower prices for pharmaceuticals, particularly during the 180-day exclusivity period in which the prices for generic drugs are often substantially higher than they are once other generics enter the market.
On the contrary, Apotex Corp., a Toronto-based generic drug maker, submitted a citizen petition in support of Mylan and Teva, charging that authorized generics are anticompetitive.
Apotex said it lost millions of dollars on paroxetine, a generic for GlaxoSmithKline plc's Paxil, when GSK licensed an authorized version of the drug to PAR Pharmaceutical Inc., of Spring Valley, N.J., which sold it during the exclusivity period.
Prior to launch, Apotex expected sales for its paroxetine product to range from $530 million to $575 million during the six-month exclusivity period. Given competition for PAR's product, Apotex said it generated only $150 million to $200 million during that period.
Indeed, Bresch said Mylan likely would look to the courts to settle the matter. "We are going to pursue all of our options to protect what we believe we are clearly entitled to under Hatch-Waxman," she said.
Meanwhile, the FDA also denied a petition submitted by Pfizer Inc., of New York, seeking to prevent generic companies from waiving the 180-day market exclusivity. Allowing eligible generic applicants to waive the exclusivity promotes competition by enabling other generic applicants to market their products sooner, the agency said.
The FDA said it sees no reason to interfere with the marketing of authorized generics or waiving 180-day exclusivity, two long-standing, pro-competitive business practices.