BIG PHARMA COULD CASH IN ON FDA'S GENERIC BACKLOG

MAY 01, 2006

Thanks to the FDA's backlog of over 800 applications for generic drugs, branded pharmaceuticals could reap substantial rewards in annual sales that might have gone to their generic counterparts. An estimated $100 billion in branded medicines are expected to lose their patents in the next 5 years, and this should have translated into lost revenue for big pharma as they competed with lower-costing generic versions of their drugs. But the FDA's Office of Generic Drugs (OGD), which reviews generic drug applications, faces an overwhelming backlog, the result of a 36% surge in applications in 2005, according to the Generic Pharmaceutical Association (GPhA), citing statements made by Gary Buehler, director of the OGD, at a GPhA conference in February 2006.

This is bad news for generic drug manufacturers, but great news for branded drug makers, who can continue to sell their products after their patents expire without fear of generic competition. In this year alone, $20 billion worth of drugs are expected to go off patent, and if half of the applications for the generics of these drugs cannot make it through the FDA backlog, the branded companies could expect an extra $10 billion in annual sales that would have gone to their generic counterparts.




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