International Plan of Mystery: ICH Guidelines for Generic Drugs

Back in October, FDA announced that it submitted a proposal to the International Council for Harmonization of Technical Requirements for Pharmaceuticals for Human Use (ICH) for the development of common global standards for generic drugs. This proposal is yet another strategy in Commissioner Gottlieb’s Drug Competition Action Plan, which seeks to address competition and accessibility of medicines in the generic drug industry.

It is not exactly groundbreaking that ICH guidelines may address generic drugs in the near future, as ICH has been inviting generic representatives to its ICH Steering Committee Meetings and Expert Working Groups since at least 2000. And the Office of Generic Drugs developed programs for working with the ICH in 2016. Nonetheless, the initiative is exciting and representative of Dr. Gottlieb’s clear commitment to the plight of drug accessibility.

The intent of the ICH proposal is to encourage and enable generic drug developers to seek approval in multiple markets. In his October 2018 announcement on FDA’s blog, Dr. Gottlieb explained the pitfalls in the current regulatory environment:

Currently, manufacturing specifications may differ between countries, and different types of tests may be required to support the approval of a generic drug in different countries. For example, right now a specific drug may need to be tested under different dissolution methods and acceptance criteria to satisfy both the FDA and the European Medicines Agency’s (EMA) regulatory requirements.

Competing regulatory schemes make it more complex and more expensive for generic developers to submit multiple applications across different jurisdictions. As such, generic developers with limited resources may seek approval in only a limited number of countries, which can limit competition, increase prices, and increase the risk of shortages.

FDA’s proposal suggests that ICH develop a series of guidelines on standards for demonstrating equivalence, like bioequivalence, for both non-complex and complex dosage forms and drug products. This might include a harmonized bioequivalence study design and bridging studies, and it may even include the development of a common reference standard for generic drug development.  The proposal itself has not yet been made public.

Dr. Gottlieb expects that the harmonization of scientific and technical standards with respect to generic drugs will bring countless benefits, including:

• The streamlining of development across markets;
• Better consistency in global quality of generic drugs;
• Better effectiveness and reduced cost of regulatory oversight through information sharing across markets; and
• The development of competition by attracting additional developers, which would presumably lower the fixed costs of generic drug development and expand patient access by increasing the number of market entrants.

FDA believes that easing the barriers to global entry for generic firms can support the economic stability of generic markets and encourage investment, which promote competition for American consumers. This competition, in theory, should lead to lower drug prices.

But it’s not clear that the plan will result in more competition or lower prices in the U.S.  While, as noted, more competition should theoretically lead to lower prices, drug pricing in the U.S. is far from transparent or logical.  Further, it is unlikely that a nascent market participant in the U.S. will dive straight into patent or exclusivity challenges, so any additional market entrants are more likely to be superfluous follow-on generics, which may not have much of an effect on drug pricing.  Then again, if the new potential entrants primarily target drugs on FDA’s List of Off-Patent, Off-Exclusivity drugs (which I like to call FDA’s generic drug hit list), increased foreign competition would likely have at least some impact on pricing. But it’s not inherent that increased competition from abroad will have any effect on pricing in the U.S.

Further, the ICH guidelines themselves must be developed before we can hypothesize on the potential impact of such a program. ICH guidelines are typically the result of extensive negotiations to create technical standards and build consensus among members. With countries of all sizes and development statuses, any ICH guideline adopted may be more stringent that a given member’s current regulatory scheme.  And because it’s unlikely that FDA, the European Commission, or Health Canada are going to relax any of their regional requirements for safety and efficacy, the generic standards adopted are likely to be more stringent than some countries’ current standards.

As such, questions abound about this proposal that really can’t be answered yet. Could an ICH guideline have the opposite effect and make it more expensive for drugs to come to market in some countries?  And if so, will it be in exchange for safer and more effective products?  Will other countries’ regulatory bodies appreciate the trade-off?  Importantly, will generic companies operating based in countries with less stringent safety and efficacy requirements invest the time and money needed to meet a potentially more stringent standard?  And are there enough generic developers out there that eschew the U.S. but can still meet its regulatory standards that there will be a noticeable effect on U.S. generic markets?  If not, the major benefits of this harmonization seem to be for manufacturers already operating in a more stringent regulatory environment.

FDA’s proposal raises a lot of interesting questions and a team of economists at FDA has likely run all these numbers, but it seems that the benefit of this plan for U.S. consumers really depends on the details of the proposal.