FDA approves first generic under new pathway designed to fight drug price gouging

FDA
The FDA has implemented several strategies to control drug costs, with many centered around increasing competition. (FDA)

Even as the Trump Administration has grabbed headlines in recent months with efforts to control drug prices, another program at the FDA has yielded early results with a generic drug approval. The FDA has approved the first generic under a new pathway created to streamline approval for generics in drug classes with little or no competition.

Apotex won the FDA’s first approval for a Competitive Generic Therapy with its potassium chloride oral solution to treat hypokalemia. Implemented last year, the program is designed to advance applications in drug classes where there’s one or zero approved products. Such classes have been vulnerable to big price hikes in recent years, as seen in Martin Shkreli's move to jack up the price of Daraprim by 5,000% back in 2015, which led to outrage and put the public's eye on pharma pricing.

Another price-hike poster child, Valeant raised the prices for Nitropress and Isuprel by several hundred percent in 2015, sparking scrutiny and an investigation for that company. Those drugs came under generic competition in late 2016 and 2017, respectively.

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The CGT pathway is new under the FDA Reauthorization Act of 2017 and allows applicants potentially faster reviews and a 180-day marketing exclusivity period after approval in certain situations. To secure the exclusivity period, drugmakers must launch within 75 days of approval.

In a statement, FDA commissioner Scott Gottlieb said the Apotex approval demonstrates that the FDA’s new regulatory pathway is “efficient and open for business.”

RELATED: New FDA commissioner Gottlieb unveils price-fighting strategies

The CGT pathway is one of several initiatives the U.S. government and FDA have explored in an effort to lower costs. Last May, Gottlieb touted multiple strategies his agency would implement, such as boosting generic approvals and highlighting regulatory “gaming” by branded drugmakers that hurts competition.

More recently, Trump and HHS secretary Alex Azar unveiled a larger drug pricing plan in May. The administration’s “blueprint” aims to boost competition, negotiations and create incentives to lower list prices. It’ll also seek to provide relief for patients with their out-of-pocket costs, among other initiatives.

After the announcement, many experts and industry watchers said the plan won't bring major changes to pricing right away. Wells Fargo analysts David Maris, for his part, wrote that the administration is "actually trying to address some of the root causes of price inflation and lack of affordability."