Approving new applications could significantly lower the cost of drugs

The question is how to reduce drug prices. The solution could be found in the Food and Drug Administration.

In recent months, politicians and organizations have written to the FDA, calling for the Office of Generic Drugs to reduce their overloaded system holding thousands of applications for new medications. Each of these 3,000 applications, called ANDAs (Abbreviated New Drug Applications), is a submission for a new generic drug.

Why is this important?

Generic drugs can cost up to 80% less than brand drugs. Of all prescriptions filled in the U.S., 86% are for generic drugs. Introducing new generics into the marketplace could increase competition and bring down prices across the board.

Is this a new problem?

The FDA will always have a backlog of new applications, says The Office of Generic Drugs has been receiving more applications than it can feasibly look over.

However, other groups have noticed the problem getting worse. The Healthcare Supply Chain Association (HSCA) wrote in a letter to the FDA that approval time for generic drugs increased almost a full year from 2012 to 2014. They also said the Administration has approved fewer generic drugs each year for the last three years.

More generic drug applications are being submitted likely because so many patents are expiring. Drug patents originally issued in the 1980’s and 1990’s are nearing their end, opening up the opportunity for generic versions to exist.

Has anything been done?

In the last few months, the issue has gained traction. Senator David Vitter (R-LA) wrote a letter to the Acting Commissioner of the FDA urging the Administration to reduce the backlog of generic drug applications.

Democratic Presidential candidate Hillary Clinton also wrote to the FDA, calling for expediting pending applications and clearing the backlog.

For more on the FDA’s generic drug applications, see this article from the Wall Street Journal.

Click here to learn more about the FDA’s drug approval process.

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