The BLOCKING Act would weaken the 180-day incentive and undermine 35 years of success
Patient access to biosimilar and generic medicines has never been more critical. High launch prices and annual price increases on existing brand-name drugs have impeded access to medicines for too many patients. That is why lowering prescription drug prices continues to be a top health care concern for America’s patients.
Generic manufacturers’ ability to continue to deliver savings to patients, however, is increasingly threatened by often well-intended but misguided policies. The BLOCKING Act (H.R. 938) is no exception.
New Generics Increase Competition, Lower Drug Costs
Experience shows prescription drug prices decline by more than half in the first year that generics enter the market1. This introduction of generic competition, therefore, provides meaningful savings to patients and has resulted in more than $310 billion in savings last year, according to our most recent Access & Savings Report2.
In terms of first generics, patients benefitted from the ability of generic developers to obtain FDA approval for more than 100 new generics in 20193. This resulted in new, more affordable treatments for patients with heart disease, cancer, multiple sclerosis, depression, arthritis and many other chronic and acute conditions.
Yet bringing a new generic to market and increasing patient access to more affordable medicine is no easy feat. Developers of generic medicines assume substantial risk and incur significant legal costs to challenge brand-name drug patents. Generic manufacturers take on these risks so they can provide affordable medicines to patients and with the understanding that, if successful, there is a potential benefit available in the form of 180-day exclusivity for being the first generic.
The 180-day exclusivity incentive is a foundational element of the Hatch-Waxman Amendments of 1984, designed to offset the costs and risks inherent in challenging brand-name patents, and has served patients well for more than 35 years. The BLOCKING Act threatens to undermine that success.
BLOCKING is a Significant Policy Change
The BLOCKING Act would fundamentally change whether generic manufacturers pursue costly patent challenges. One of the flaws is its reliance on a 30-month review timeline. If a generic manufacturer is unable to obtain FDA approval in that timeframe, 180-day exclusivity could be triggered and its value entirely lost.
The challenge with this approach is that FDA data shows the median approval time for first-filed applications with a so-called “Paragraph IV” certification (e.g., a challenge to a brand-name patent) is 51 months – nearly two years longer than what is specified in The BLOCKING Act4. Moreover, the COVID-19 pandemic may further complicate a generic manufacturer’s ability to gain approval within the median approval timelines that this data is based.
Thus, for generic developers, challenging brand-name patents becomes a riskier proposition under The BLOCKING Act given how it is constructed and the time it typically takes to obtain FDA approval.
Competition Delayed Keeps Drug Prices High for Patients
With the uncertainty introduced by The BLOCKING Act, patient access to new generic medicines will be delayed and patients will continue to pay the high price of brand-name drugs. In an economic analysis of The BLOCKING Act, Matrix Global Advisors found the delay of only one generic medicine would cause $1.7 billion in additional spending on brand-name drugs5. And that is the cost of only one delay. When one considers the number of new generic applications and FDA’s 51-month median approval time, the cost of delayed competition is likely to be far greater and the costs to patients would be compounded.
Today, AAM’s members manufacture more than 60 billion doses of medicine across nearly 150 facilities in the U.S. We strongly encourage Congress to revisit The BLOCKING Act and not include it in any year-end legislative package. Patient access to new generic medicines is on the line and the only incentive to challenge brand-name drug patents should be preserved.
By Dan Leonard, AAM President and CEO
1 IMS Institute for Healthcare Informatics, “Price Declines after Branded Medicines Lose Exclusivity in the U.S.,” January 2016 (Link).
2 AAM, “Securing Our Access & Savings: 2020 Generic Drug & Biosimilars Access & Savings in the U.S. Report,” September 2020 (Link).
3 FDA, “First-Time Generic Drug Approvals 2019,” February 2020 (Link).
4 FDA, “Time to AP for FF ANDAs with PIV at time of approval,” September 2020.
5 Alex Brill, Matrix Global Advisors, “The Unintended Economics of the BLOCKING Act,” January 2020 (Link).