Authorized generics (AGs) is a less frequently heard terminology but an effective strategy by brand manufacturers to retain market share when generic competition enters the market. While it is largely debated by the critics whether AGs hinder generic launches, it is equally a mechanism that adds value for patients and the pharmaceutical market as a whole.
An authorized generic is the brand manufacturer’s own product repackaged and marketed as a generic drug either through a subsidiary or a third party. Instead of submitting an abbreviated new drug application (ANDA), an AG leverages the New Drug Application (NDA) of the original branded drug to facilitate its launch; this means that an AG is essentially the branded drug in a separate, different packaging.
To launch an AG, the brand manufacturer only needs to notify the FDA of the launch which then allows the AG to be launched much earlier than a traditional generic drug. Moreover, an originator company can launch an AG at any point during the brand’s life cycle, regardless of patent-related restrictions. The holder of the NDA is allowed to market the branded drug and the AG at the same time. The main purpose of AGs is to provide access to the drug either at a lower or at a near-generic price to customers who need it.
Notable differences among branded drugs, AGs, and generics can be seen in the table below
| Branded | Authorized generic | Generic | |
|
Active ingredient |
Same | ||
|
Inactive ingredients |
Standard |
Same as the branded drug |
Different from the branded drug |
|
Regulatory |
FDA approval via filing an NDA | Covered under branded drug’s NDA |
Approved through ANDA |
|
Manufacturing |
Standard | Done by the originator company |
Done by someone else besides the branded drug company |
|
Cost to patient |
High | Low |
Low |
| Other |
Listed in the Orange Book |
Not listed in the Orange Book |
Listed in the Orange Book |
The competition dilemma:
While the first ANDA applicant to challenge the branded drug is granted 180 days of exclusivity during which period no other ANDA filing can be approved by the FDA, the branded company can launch an AG or license it to another company under the branded drug’s NDA.
It is relatively uncommon for the manufacturer of a branded drug to produce its AG prior to its Loss of exclusivity (LOE) but it is not far from reality as launching a branded generic at a reduced price can also help to fend off criticism around drug pricing in addition to reducing competition in a cut-throat market.
Some examples where this has been observed are given below:
- In 2016, Mylan had released an AG of its EpiPen epinephrine auto-injector for $300, half the price of the branded product as it had faced criticism over its decision to significantly increase the cost of the EpiPen
- Gilead launched AG versions of two of its hepatitis C virus drugs, Harvoni and Epclusa in 2019, even before their LOE in an effort to remain competitive in the strongly competitive HCV market.
In each of the above cases, the manufacturers not only garnered positive media attention but created potential savings for patients. These examples raise important questions about the incentives for manufacturers of branded medicines to introduce authorized generics and the need for greater education among patients and healthcare providers on this topic.
With a focus largely to generate awareness, leading manufacturers announced the formation of The Coalition for authorized Generics which will help both providers and patients by seeking to remove unnecessary barriers to these medicines by publishing an educational tool designed specifically for patients and pharmacists.
The AG market is poised to grow and add value to the Healthcare industry as a whole. Bringing an AG to the market, as a follow-on to the legacy brand can bring incremental value to the manufacturer as it can offer continued revenue for investment into pipeline development, and further support process and capabilities development.
Most importantly, the consumers can greatly benefit from the availability of AGs in the same formulary tier as traditional generics. It can provide the patient with a seamless switching experience and hence increase drug adherence. This resonates equally with the payers as it can better manage out-of-pocket costs, and minimize the high-cost consequences from medication nonadherence.
#authorisedgeneric #DrugPricing
Sources
https://cen.acs.org/pharmaceuticals/Gilead-launch-authorised-generics-two/96/i39
https://www.managedhealthcareexecutive.com/view/how-authorised-generics-reduce-drug-pricing
https://biopharmadive.com/news/lilly-follows-gilead-mylan-lead-with-authorised-generic-play/549760/
https://www.fda.gov/drugs/abbreviated-new-drug-application-anda/fda-list-authorised-generic-drugs
https://www.centerforbiosimilars.com/view/are-authorized-biologics-poised-to-hold-back-biosimilars