Drug Pricing Panacea Or Just PR Victory? Expedited ANDAs May Have Limited Impact

In theory, reviewing generic applications faster should speed competition; in practice, FDA's new policy likely won't make too much difference.

FDA has slightly expanded the types of ANDAs eligible for expedited review, but the change may not provide much of an incentive for generic firms to pursue a particular market.

FDA generated a fair bit of buzz when it released an updated Manual of Policies and Procedures that added "sole-source" drugs to the list of generic applications that could be expedited within its queue, with some declaring that the agency had taken control of the pricing debate and prevented the next Martin Shkreli.

In the MaPP, sole-source products were defined as those where there is only one approved drug listed in the Orange Book and no blocking patents or exclusivity. FDA's Office of Generic Drugs now is allowed to expedite the review of such an ANDA, except if the sole-source product was approved pursuant to a suitability petition.

They would join a list of applications eligible for expediting that includes drugs in shortage, part of the President's Emergency Plan for AIDS Relief, and potential first generics with patent certifications.

What Would An Expedited Application Even Get?

However, questions remain as to what advantages an expedited application would gain, and whether they would be sufficient to encourage a submission.

Robert Pollock, senior advisor and outside director to the board of Lachman Consultants, told "The Pink Sheet" that sponsors don't have enough experience to even guess what gaining priority means.

Pollock also said it remains to be seen how the emerging ANDA review clock factors into any type of priority review mechanism.

ANDAs submitted now have a 75% chance of receiving a first action within 15 months. And beginning in October, there is a 90% chance that any ANDA submitted after that date will receive an action within 10 months, as per the generic drug user fee commitment letter (Also see "GDUFA Performance Goals For Fiscal Years 2013-2017" - Pink Sheet, 12 Dec, 2011.).

FDA told "The Pink Sheet" that "expedited review under the MaPP means that FDA will seek to take action faster than the goal dates articulated under GDUFA."

"The approval timeframe will depend on the quality and completeness of the ANDA," the agency said. "FDA has the capability of acting much faster than the GDUFA goal date when both the application and the manufacturing facilities are in good shape."

Given FDA's current pace of generic reviews, however, Pollock estimated that a priority ANDA could be approved in 12 to 21 months, depending on application quality and other factors.

Kurt Karst, a director at Hyman, Phelps and McNamara, said in an interview that hopefully an expedited review will wind up faster than the 10-month standard to be implemented at the end of GDUFA I.

Karst said FDA has reviewed ANDAs faster than that historically. In the 1990s, actions were completed in six to seven months, he said.

The first ANDA with a GDUFA review clock was approved in about 10 months, well before the goal (Also see "FDA Approves Its First ‘Clocked’ ANDA" - Pink Sheet, 19 Aug, 2015.).

FDA Still Can't Control Everything

Yet, even if FDA answers the outstanding questions about prioritizing ANDAs, it still may not be able to truly prioritize every application that deserves that treatment.

Sponsors must cooperate in order for FDA to meet an ambitious approval time. That includes submitting a quality application up front and responding to FDA information requests and questions quickly.

Pollock said that could allow a first- or second-cycle approval, and potentially meet a 12-month time-frame. The ANDA also likely would have to be a simple dosage form to travel at that type of review speed, he said.

FDA has said that a large portion of its pending ANDAs are awaiting a response from the sponsor (Also see "Generic User Fees: FDA Goes On Backlog Offensive" - Pink Sheet, 16 Oct, 2015.).

Pollock said FDA likely can control 75% and industry 25% of the process.

Karst also noted the facility inspection still could slow down any expedited efforts, especially if it is outside the US.

Karst said scheduling a foreign inspection can be difficult and it would depend on a number of factors outside FDA's control.

It is no secret that foreign inspections have been difficult for FDA to conduct. Even though the agency has increased its foreign inspection output in recent years, congress still is concerned it is not reaching its goal of parity between foreign and domestic inspections (Also see "House Demands More Info On FDA Overseas Operations" - Pink Sheet, 18 Jan, 2016.).

To Expedite An Application, First You Need One

Even if a sponsor were confident that it could get a speedy review, that might not be enough encouragement to get into a market that the firm wasn't otherwise interested in entering.

Being able to sell a few months earlier probably isn't going to make the difference if it's not a market the firm wants to be in anyway. Theoretically, the extra time means that the firm could charge more for a few months until another, regularly scheduled ANDA comes in and drives the price down further.

But in reality, pharma businesses tend to want more defined incentives before making their R&D bets, be it the classic 180-day exclusivity for a generic or patent protections for new drugs. Neither one guarantees profits, but those structures make planning easier. Even the priority reviews for innovator NDAs and BLAs has fixed timeframe, which allows for easier launch projections.

The product that started it all, Turing Pharmaceuticals AG's Daraprim (pyrimethamine), is a good illustration of the challenge in getting generics to markets where they weren't before. Shkreli's former company bought the product from Impax Laboratories Inc. in August 2015, boosted the price, and prompted an industry-wide maelstrom.

A generic competitor hoping to come in and undercut Daraprim would now have a tempting target, and would likely be seen as national hero. If FDA can get them to market a few months earlier, all the better. But the prescription volume for the anti-parasitic remains small.

Development times and costs are relatively fixed for ANDAs, regardless of the size of the market being targeted, so firms tend to go for the larger, more lucrative ones. That's probably why no generic had gone after Daraprim before Shkreki raised the price.

In emails subpoenaed by congressional investigators, Turing executives estimated that they could only sustain the price for a few years, and given the realities of ANDA development times, that seems like a good estimate.

But they didn't count on the firestorm of criticism and payer pushback for the pricing move that captured the public's attention after concerns were raised by the Infectious Diseases Society of America.

The thing that's probably going to stop the next Martin Shkreli isn't a faster FDA review, it's the headaches the execs trying to employ the strategy will face.

Indeed, the Daraprim episode has served to underscore some of the weakness of the US generic system, in addition to highlighting how ANDAs are a key to controlling pharmaceutical spending. Generic drugs are in many ways the worst of both worlds for a business: razor-thin commodity margins for most products, but expensive, technical barriers to enter the market in the first place.

It's a dynamic that spawned Shkreli and also created shortages of many injectables in recent years. And there are no quick policy fixes that would incentivize multiple sponsors to enter markets while also keeping prices low.

Responding To Congress

Discussion of that kind of policy reform hasn't really gotten off the ground, but politicians are certainly complaining that cheap drugs should get to market faster. FDA's modification of the review MaPP follows congressional pressure to speed up generic drug reviews to address drug price spikes.

Center for Drug Evaluation and Research Director Janet Woodcock told a Senate hearing that multiple levels of ANDA review speed may be possible, but probably not until after FY 2017 when GDUFA II begins (Also see "Could Drug Price Spikes Spur ANDA Priority Reviews?" - Pink Sheet, 28 Jan, 2016.).

The MaPP change may be able to diffuse at least one congressional effort to create priority ANDA reviews.

Sens. Susan Collins, R-Maine, and Claire McCaskill, D-Mo., introduced legislation that would require a 150-day review for an ANDA of a drug that has been marketed by not more than one sponsor in the last three months and for which no more than two applications have received tentative approval.

ANDA priority reviews were a topic of GDUFA II negotiations before legislation began to be introduced (Also see "GDUFA II: Priority Reviews Considered For Some ANDAs" - Pink Sheet, 6 Nov, 2015.).

The Collins/McCaskill bill also would grant a priority review voucher to the sponsors of such an ANDA upon approval.

FDA already has said it is not a fan of the priority review voucher programs already in place and likely would not want more to be created.

Agency officials have complained that vouchers increase FDA's workload with no evidence they are meeting their goal to incentivize drug development (Also see "Review Voucher Program For Rare Pediatric Diseases Should Not Be Reauthorized, FDA Says" - Pink Sheet, 2 Mar, 2016.).

MaPP Affects Handful Of Applications

The agency said expediting sole source applications should affect "up to 125 more ANDAs than prior to the revision."

FDA has said that only a small percentage of innovator drugs do not have generic competition or at least an ANDA pending approval. The numbers suggest that even with a priority pathway there may not be many more applications that could be pushed to the market faster (see graphic).

Some sponsors also may not want their ANDA prioritized for intellectual property or other reasons (Also see "‘First Generic’ Definition Is Two-Sentence Tug Of War For FDA, Industry" - Pink Sheet, 8 Dec, 2014.).

Source: FDA presentation slide