FDA Approves Ranbaxy’s Lipitor Generic – How Does the Agency Approve Generic Drugs?
On the day that Pfizer’s patent for its cholesterol drug, Lipitor, expired, the FDA granted approval to Ranbaxy to begin selling its generic or copycat version of the same drug, named Atorvastatin. Besides Ranbaxy, Watson Pharmaceuticals Inc. is also selling a generic version of the drug under agreement with Pfizer.
As Ranbaxy was the first to challenge Lipitor with a generic drug, the company will be allowed by the FDA to sell its drug for six months (till May 2012) before other generic drugs come onto the market. This exclusive six month period is in accordance with the 1984 Hatch-Waxman Act.
But how does the FDA give approval to generic drugs? And what happens once a pharma company’s patent for its drug expires?
FDA approval for generic drugs
The process for approval of generic drugs by the FDA includes the following steps:
- Drug companies must submit an abbreviated new drug application (ANDA) for approval to market a generic product.
- When patents or other periods of exclusivity expire, manufacturers can apply to the FDA to sell generic versions.
- The ANDA process does not require the drug sponsor to repeat costly animal and clinical research on ingredients or dosage forms already approved for safety and effectiveness.
- Generic applicants must scientifically demonstrate that their product is bioequivalent (i.e., performs in the same manner as the innovator drug).
- Scientists can demonstrate bioequivalence by measuring the time it takes the generic drug to reach the bloodstream in 24 to 36 healthy, volunteers.
- When an ANDA is approved, the FDA adds the drug to its Approved Drug Products list, also known as the Orange Book, and annotates the list to show equivalence between the reference listed drug and the approved generic.
What can pharma companies do once drug patents expire?
The FDA states that drug patents expire 20 years from the date of filing of the patent.
Lipitor was Pfizer’s biggest selling drug – bringing in total annual sales of $7.6 billion in the US until September, 2011. The company, now having lost its patent for the drug, has made deals with pharmacy benefit managers (PBMs) and health insurers to prevent patients buying Ranbaxy’s generic version of the drug until the end of May 2012, when other firms will start selling their copycat versions of Lipitor. Bloomberg.com quoted Watson Pharmaceutical CEO Paul Bisaro as saying that “Such deals may help Pfizer retain as much as 40 percent of the Lipitor market during the six-month period in which Ranbaxy and Watson will be the only providers of generic versions.”
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