FDA rules on generics to aid firms

The Food and Drug Administration will make it easier for pharmaceutical companies to bring more complex — and more profitable — generic drugs to market, throwing the struggling industry a crucial lifeline.

Unlike relatively simple pills, drugs that combine a medicine with a delivery device can be harder to copy and therefore often don’t have generic competition. For manufacturers that do the extra work required to bring such products to market, they can be more profitable. But regulatory hurdles have made getting them approved more difficult, FDA Commissioner Scott Gottlieb said Tuesday at a time when generic drug manufacturers such as Mylan and Teva Pharmaceutical Industries are hurting.

Making copycat versions of complex drugs “can be a high-value opportunity for a generic drug developer,” Gottlieb said in a statement. “These higher-value generic business opportunities can help underwrite the costs of other generic applications at a time when we believe the generic industry is facing new economic pressures from rising costs, supply chain consolidation, increased competition and declining reimbursement on many competitive generic medicines.”

In response, the agency is offering updated proposals to speed copies of drugs that are delivered through patches on the skin, including contraceptive products. A new guideline included among the proposals would help companies that want to copy Hisamitsu Pharmaceutical’s CombiPatch, which has no generic competition and sold $46.1 million worth of prescriptions last year, according to data from Bloomberg Intelligence.

There are only a few birth-control patches on the market, including CombiPatch, and more than 182,000 prescriptions were written last year for CombiPatch, according to Bloomberg Intelligence data. The best-selling contraceptive patch is Mylan’s generic copy of Johnson & Johnson’s now-discontinued Ortho Evra. Mylan’s version, Xulane, had 1.5 million prescriptions last year, according to Bloomberg Intelligence.

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As part of President Trump’s effort to bring down drug prices, Gottlieb has been pushing the FDA to help companies with the development of complex generics. In July, the agency issued 10 new draft guidances and six revised ones for complex drugs.

Tuesday’s announcement includes two new guidances and 23 updated ones. Gottlieb said the FDA plans to issue additional policies in the months ahead.

In the meantime, makers of generic drugs continue to struggle. On Tuesday, Morgan Stanley’s David Risinger became the second analyst in the last week to downgrade his rating on Mylan’s shares. In a note to clients, Risinger said that “our thesis is broken; we no longer expect improving prospects and rising pipeline expectations.”

Following the FDA announcement, Mylan’s stock was down about 2 percent Tuesday, closing at $34.61.

In August, the agency approved a generic version of Mylan’s EpiPen, the most well-known complex drug. Even though the drug portion, epinephrine, is old, Mylan had patents that made it hard for a generic competitor to exactly copy the EpiPen.

Anna Edney is a Bloomberg writer. Email: aedney@bloomberg.net