Authorized generics might just be the answer for drug manufacturers whose patents for their branded drugs have expired. Instead of risking the loss of market share when other drug companies enter the generics marketplace, the brand name manufacturers could develop their own generics.
An authorized generic is exactly the same product as an approved branded drug, but is marketed without the brand name on the label. Usually sold at a lower price, it can be marketed by a branded drug company or by another company with the brand company’s permission.
“By making an authorized generic, a brand manufacturer gets a jump start on the competition as generics start to appear,” says Karen Berger, PharmD, a staff pharmacist at Plymouth Park Pharmacy in Fair Lawn, NJ.
“Authorized generics, which are identical to the brand, should not be confused with a branded generic that has gone through the abbreviated new drug application (ANDA) process and is assigned a name other than its chemical name,” she says.
Leaving nothing to chance
“While a separate NDA is not required for marketing an authorized generic, FDA requires that the NDA holder notify the FDA if it markets an authorized generic. The NDA holder may market both an authorized generic and its brand name product at the same time,” says Charlie Kohler, spokesperson for the FDA.
That’s exactly what PDL BioPharma did this year to protect its expensive blood pressure medicine Tekturna (aliskiren tablets) under threat of a generic competitor and the end of its patent last year. It produced its own authorized generic of the drug that sells for less than its branded version but more than competing generics.
In essence, PDL is competing against itself and maximizing profits, suggests an article in KHN. According to the Pharmaceutical Research and Manufacturers of America (PhRMA), authorized generics increase competition through lower prices and cost savings.
Eli Lilly used a similar strategy, making authorized generics before its patents for Humalog (insulin lispro) expired. Eli Lilly recently made its authorized generic of insulin lispro injection available at half the cost.
Mylan did the same for its EpiPen, and anticipates that 85% of prescriptions will shift to its new authorized EpiPen generic.
Those are just a few examples of the nearly 1,200 authorized generics tracked by the FDA.
Why authorized generics?
One of the primary goals for pharmaceutical brand teams that undertake an authorized generics strategy is to slow the pace of market share decline after market exclusivity loss, according to a 2015 study from Cutting Edge Information.
“While brand name manufacturers want patients to receive authorized generics, I believe there is absolutely no need to specifically request an authorized generic once there are various generic companies offering a medication. A regular generic should do just fine as well as save money,” Berger says.