Updated on 29 January 2013
(L) Ms Debbie Toscano is senior industry analyst and (R) Mr Justin Collishaw is industry analyst for Frost & Sullivan’s global life sciences program
The approval process for new drugs in the US is tightly regulated by the Food and Drug Administration (FDA), which has the final say in whether or not a company may market a new drug. While the FDA desires to ensure availability of new innovative drugs as well as cost-effective generics to patients in need, they are also meant to protect the public from unnecessary risks of new drugs.
The FDA occasionally finds themselves at odds with drug companies, which sometimes progressing to even a lawsuit. Many of the disagreements between the pharma industry and the FDA surround generic drug approvals, whether they originate from generics companies seeking approval, or pharmaceutical originators attempting to block approval of a generic.
A recent example of a disagreement between a generics company and the FDA was the delay of Watson Pharmaceutical's marketing approval for their generic version of Actos (pioglitazone), a widely prescribed drug for diabetes. Prior to the expiration of the patent for Actos, four generic drug companies, including Watson, Ranbaxy, Mylan, and Teva Pharma, simultaneously filed abbreviated new drug application (ANDA) for the approval of their respective versions of Takeda Pharmaceutical's Actos.
Normally, the first filer of a generic drug is awarded a full six months of marketing exclusivity by the FDA before other generics can launch, thus keeping profits relatively high for the first filer(s). In this case, shared exclusivity was awarded to three-of-the-four filers. For reasons not fully disclosed, the FDA denied Watson a piece of the shared exclusivity period, a decision that cost Watson millions of dollars. Following unsuccessful efforts to resolve the dispute with the FDA, Watson filed a suit to challenge the decision. The case was finally decided in Watson's favor, allowing them to launch their generic Actos in October 2012. However, nearly half-of-the-six-month exclusivity period was lost.
On the other side of the issue, they are attempts made by big pharma to delay or block generic competition and, if successful, the investment of a few hundred thousand dollars tied up in a lawsuit is well worth the additional revenue gained, if there is success in extending the exclusivity of a branded franchise that is possibly worth millions of dollars each quarter.