2017 Fall Newsletter- PHSI Analysis of Authorized Generic Drugs

In the past year, there has been increasing interest in and awareness of Authorized Generics (AGs) by supply channel participants.  Several manufacturers have launched AGs before equivalent ANDA generics have been approved.  Despite the increasing prevalence of AGs, Pharmacy Healthcare Solutions, Inc. (PHSI) recently surveyed 200 pharmacists and uncovered that two thirds could not define an authorized generic.  This article should provide pharmacists with additional insights into authorized generics.

According to the FDA, an authorized generic is defined as “an approved brand name drug that is marketed without the brand name on its label. Other than the fact that it does not have the brand name on its label, it is the exact same drug product as the branded product.”  Authorized generics enable innovator manufacturers to sell their product via another NDC number as a generic.  The AG is sold at a different, lower price than the approved innovator (NDA) product.  Authorized generics are most commonly sold via their generic or chemical name, although they can also be sold as branded generics (e.g. oral contraceptives).

Authorized generics are made under the same process as the originator brand and generally have the same size, shape and markings.  Their inert components and excipients are also the same as the innovator, unlike ANDA generics.  A comparison of brand, AG, and ANDA drugs can be seen in the chart below.

Updated AG Chart

Because of their similarity to the brand product, substitution laws look favorably on AGs.  In its preamble[1], the FDA Orange Book states that:

“Any drug product in the Orange Book repackaged and/or distributed by other than the applicant (e.g., an authorized generic) is considered to be therapeutically equivalent to the applicant’s drug product even if the applicant’s drug product is single source or coded as non-equivalent (e.g., BN). Also, although not identified in the Orange Book, distributors or repackagers of an applicant’s drug product are considered to have the same code as the applicant.”

For states that use the Orange Book for generic substitution guidance or list it as a reference source, pharmacists should be able to substitute an AG for the innovator product, just like an A-rated ANDA generic drug would be substituted.

Pharmacists should remember that AGs receive the same Orange Book code as their innovator product.  Generally, this means that both the AG and innovator are A-rated.  Recently, however, AGs have been introduced for non-A-rated innovator products.  This can occur when AGs launch prior to the availability of an ANDA generic.  In this case, the innovator product would be “Not Rated”, or NR, and the AG would also receive a “Not Rated” rating.

A second scenario can occur when the innovator product is B-rated.  This happens when two brand products have been approved via the 505(b)2 process for the same active ingredient, strength, and route of administration.  Because both brand products are pharmaceutically equivalent but not bioequivalent, an Orange Book B rating is assigned to these brands, indicating that the brands are not interchangeable.  Because the innovator is B-rated, an AG launched to this product would also be B-rated.  According to state laws where the Orange Book is referenced, in these situations, the AG is still substitutable for its innovator product, as the AG is identical to the brand, innovator product, despite the B ratings.

An example of this can be seen with Mylan’s Epinephrine Auto Injector (NDC 49502-0102-02).  The innovator, EpiPen, is a BX-rated product to Adrenaclick (Amedra Pharmaceuticals).  Because EpiPen is BX-rated, its Mylan AG also has a BX rating.  However, the Mylan AG is still an appropriate generic substitute for EpiPen.  Because the EpiPen is BX-rated to Adrenaclick (Amedra Pharmaceuticals), the Mylan AG is not a generic substitute for Adrenaclick.   Anecdotally, we have heard of pharmacists concerned about dispensing the BX-rated Mylan AG for Mylan’s EpiPen because of the BX rating.

PHSI performed a review of all authorized generic agents listed in the Medi-Span drug compendia and found:

  • There are 852 unique AG prescription products listed. Based on multiple package sizes, this amounts to a total of 1,169 NDCs.
  • Of the 852 unique AGs, approximately 3% have branded generic names (e.g. Ocella, Lopreeza, DermacinRx), while the remaining 97% of products are chemically named.
  • Greenstone is the most frequently seen labeler in the AG space (242 AG NDCs), followed by Sandoz (154 AG NDCs), and then Prasco (106 AG NDCs).
  • Although not directly related to the purchase price, when looking at the current AGs in the market where the brand product is still active, the published WAC price is approximately 48% lower than the WAC price of the corresponding brand.

AGs provide alternative generic supply options for all stakeholders.  Pharmacy costs decrease for generics as the number of suppliers increase.  Patient satisfaction with generics may increase, as product appearance differences are minimized with an AG.

Although many benefits can be seen by using an AG, cost is often the deciding factor when pharmacies choose a preferred generic manufacturer.  When pharmacy chains use a wholesaler source program for purchasing, the wholesaler decides on the preferred generic. A preferred generic helps to ensure product uniformity across pharmacies in a chain and enables pharmacies and buying groups to negotiate competitive prices.  Authorized generics may be the preferred generic product if their manufacturer is the successful bidder.  Even if they are not the preferred generic, AGs may be a purchasing option in most wholesaler systems.  Interestingly, PHSI has found that most pharmacy dispensing systems do not flag products as authorized generics or have specific fields in their drug file that contains this information.

The recent awareness of AGs at a consumer level (epinephrine auto-injector AG and salmeterol/fluticasone inhaler) may lead to consumer inquiries about these products.  PHSI hopes that this overview will enable dispensing pharmacists to address questions and make informed product selection decisions when evaluating generic product options for their patients.

[1] United States Food and Drug Administration (FDA); Approved Drug Products with Therapeutic Equivalence Evaluations; 37th Edition; page 11; https://www.fda.gov/downloads/Drugs/DevelopmentApprovalProcess/UCM071436.pdf

 

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