The generic drug industry is making claims that upcoming FDA requested labeling changes will end up costing them a total of $4 billion per year. These changes have set off a battle between the U.S. Food and Drug Administration (FDA) and the generic drug makers.
The FDA proposal involved rapid adjustments to generic drug labeling if an issue was found with the original reference listed drug (RLD). This would enable word to get out to consumers while the FDA reviewed whether or not a change was necessary. Generic manufacturers would also be able to send “Dear Health Care Provider” letters.
FDA Rule has Little to No Support from the Industry
The FDA rule is under attack from many fronts; both for the rule’s legality as well as its potential cost. Legal issues were raised by pharmaceutical innovators, various legal experts, members of Congress, and the generic drug industry. Lately some of those same Congressmen are taking a closer look at the FDA labeling rule’s cost to both drug makers and consumers.
Naturally, the FDA differs on the potential cost estimates. In fact, the new rule was significantly below the financial impact threshold that triggers a review from the federal Office of Budget and Management. Several Republican lawmakers questioned the criteria the FDA used in analyzing the potential financial impact of the labeling law.
The Generic Pharmaceutical Association (GPhA), a trade industry group representing generic manufacturers, released a study showing a $4 billion increase in pharmaceutical spending due to the new rule. $1.5 billion of that cost would be borne by taxpayers, and the rest by private health insurance companies.
A large portion of this cost increase would be due to additional product liability exposure for generic drug makers, according to the GPhA. “Because the FDA fails to consider liability costs for generic manufacturers, the agency reaches the erroneous conclusion that the Proposed Rule would ‘generate little cost,’” according to the GPhA report.
It remains to be seen whether or not this dispute will prevent the implementation of the new FDA rule.
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