Generic makers to FDA: Labeling rule risky for patients, adds $4B in annual costs

Generic drug companies are fighting back against a new FDA proposal that would require them to update product labeling as soon as they learn of new safety information. The rule would essentially overturn a 30-year-old law--and put companies on the hook for liability lawsuits.

Now, generic drugmakers are prohibited from updating safety information before the product's original developer does. During a Congressional briefing on Friday, the Generic Pharmaceutical Association (GPhA) gathered a panel of experts, who argued that changing the labeling laws would endanger patients. The House of Representatives Energy & Commerce Committee plans to hold a hearing on the matter Monday.

The problem, the GPhA's experts said, is that different versions of the same drug could end up carrying conflicting or inconsistent labels. "Disregarding decades of regulatory stability in this way will create unwarranted confusion, raises patient safety concerns and threatens the system that created thousands of affordable options for consumers," said Gordon Johnston, former deputy director of the FDA Office of Generic Drugs, in a statement from the GPhA.

What's more, the labeling change could expose the generics industry to lawsuits, which would raise costs, the GPhA argued. The association cited a report by Matrix Global Advisors, which estimated that the rule, if enacted, would drive U.S. health care costs up by $4 billion a year--$1.5 billion of which would be incurred by Medicare and other government payers, and the rest by private insurers and patients.

The generics industry has been shielded from liability lawsuits since 2011, when the Supreme Court ruled that because the FDA didn't allow safety information to be changed by generic drugmakers, they weren't accountable for failing to warn patients about risks. Under the new rule, generics firms would no longer enjoy that protection.

Supporters of the rule change argue that it's necessary because there are 2,000 generic drugs on the market today that no longer have a branded counterpart. "Generics now constitute the majority of all prescriptions filled, so generic manufacturers' inability to initiate labeling poses a threat to patient safety," said consumer watchdog Public Citizen in a statement released prior to the House hearing, where Allison Zieve, director of the organization's litigation group, will testify.

Public Citizen, which petitioned back in 2011 for the FDA to authorize generic drugmakers to make labeling changes, isn't buying the argument that such a rule would raise health costs. Instead, the group argues, it should lower costs because it "will help avoid liability by preventing injuries from occurring in the first place."

- read more at Reuters
- here's the GPhA's statement
- here's the statement from Public Citizen

Special Report: Top 10 Generics Makers by 2012 Revenue

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