FDA Approves First Drug Under New Competitive Generic Therapy Program

Equities Research  |

The FDA hit a key milestone yesterday on its path to lowering the high cost of drugs in this country with the approval of the first generic drugs to receive its Competitive Generic Therapy (CGT) designation. This new approval pathway was created last year to expedite the development and review of a generic drug for products that lack competition.

The approval was granted to Apotex, the privately held, largest producer of generic drugs in Canada for potassium chloride in oral solution for the treatment and prevention of hypokalemia—low blood potassium levels—in patients who are on diuretics, and when dietary management with potassium-rich foods is insufficient or diuretic dose reduction is not possible. Low potassium levels can lead to abnormal heart rhythms, especially in people with heart disease, as well as lightheadedness, fainting or, in extreme cases, heart failure paralysis or even death.


Source: Association for Accessible Medicines, 2017

The quick implementation of this new pathway is part of our broader effort to foster generic competition and help address the high cost of drugs. So are our efforts to narrow the time it takes for generic drugs to reach the market by reducing the number of review cycles that generic applications typically undergo. This new generic drug application was also approved in its first cycle of review. This approval demonstrates that the competitive generic therapy pathway is efficient and open for business. This pathway is a key step in making safe and effective generic drugs available to patients quickly and ensuring there’s adequate competition so patients have affordable access to the treatments they need.

- Scott Gottlieb, MD, FDA Commissioner.

Under the FDA Reauthorization Act of 2017, a drug can be designated as a Competitive Generic Therapy (CGT) if there is inadequate generic competition for that drug, meaning there is not more than one approved drug in the active section of the Orange Book, the FDA's list of "approved drug products with therapeutic equivalence." Applicants for drugs that receive a CGT designation may receive review enhancements and expedited review of their Abbreviated New Drug Applications (ANDA).

Applicants for drugs that receive a CGT designation are also eligible for a 180-day period of marketing exclusivity if they are the first approved applicant for that CGT and meet certain other conditions. Apotex's products approved yesterday, potassium chloride 10% and 20% oral solution, are eligible for those 180 days of exclusivity. Notably, in order to motivate generic manufacturers, the CGT rules dictate that the applicant must commercially market the approved drugs within 75 days after the date of approval of its ANDA or else forfeit its exclusivity.

John Commins wrote in Health Leaders yesterday that the Pharmaceutical Research and Manufacturers of America had supported last years's FDA Reauthorization Act. Additionally, Commins cited Blair Child, SVP of Public Affairs at Premier  (PINC), as saying that "the FDA's actions on Wednesday 'enhance access to affordable treatments for patients with low potassium blood levels. On a larger scale, FDA's use of this new expedited process will create competitive friction for single-source generic drugs to foster market forces, which can help drive down prices.' "


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Symbol Name Price Change % Volume
PINC Premier Inc. 38.34 -0.03 -0.08 512,282 Trade

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