Opinion

What Are Authorized Generics and Why Should You Care?

By Robert Popovian & Brendan O’Leary
January 27, 2020 at 5:00 am ET

There is an under-appreciated category of medicines that offers an elegant solution to some of today’s concerns about quality, supply reliability and high drug prices. They are called authorized generics, and they are a valuable subset of America’s generic medicines, which make up 90 percent of drugs dispensed in retail pharmacies.

An authorized generic drug is the same as the brand-name drug but does not use the brand name on the label. Like traditional generics, AGs are considered bioequivalent to the brand medication (meaning they get to the part of the body where the drug works and in the same amount) and have the same active ingredients as the brand-name medicine. But, unlike other generics, AGs always have the same inactive ingredients as the brand and are generally the same size, shape and color, which makes them an important option in the individualized treatment of patients.

In some cases, changes in inactive ingredients may not be well-tolerated by certain patients. In fact, in a 2018 study published in a peer-reviewed journal, authors concluded that patients “switching from branded to authorized generic drug products was associated with lower switchback rates compared with switching from branded to generic drug products.”

All medicines — traditional generics, authorized generics and branded drugs — must meet the same standards of quality and manufacturing set forth by the Food and Drug Administration.  Doctors and patients deserve to have confidence not only in a drug’s formulation but also in the integrity of its manufacturer.

Making a reliable supply of quality medicines is no simple task. Pharmaceutical manufacturing requires hundreds of steps and, sometimes, hundreds of tests before the medicines can be released to patients.

AGs are made by the manufacturer of the original brand-name drug and generally in the same manufacturing facility as the brand. Traditional generics are made by different manufacturers in their own facilities using their own processes.

AGs carry the legacy of the brand-name medicine’s years of clinical research, data and patient, pharmacist and physician experience. Just as we demand scientific rigor when companies introduce new, ground-breaking therapies, generic medicines are expected to deliver value from quality science and manufacturing. As a report by the Federal Trade Commission found, “consumers benefit and the healthcare system saves money” when an AG enters the market.

In the United States, the availability of reliable and inexpensive generic medicines is a cornerstone of our health care system. However, awareness of what AGs are is surprisingly low despite being on the market since the 1980s and further information provided on the FDA website.   

In addition, the recent removal of AGs from a little-known formula used to determine the rebates manufacturers pay to Medicaid created a disincentive for companies to maintain AGs on the market. Before policymakers consider any other actions that would undermine these important medicines, they would do well to understand the value of AGs and review the FTC findings that the United States needs a robust AG industry to create competition — which in turn helps maintain quality — in the generics marketplace. 

Generics from trusted manufacturers are essential for pharmacists and physicians to help ensure their patients continue to receive high-quality and cost-beneficial medications. 

 

Robert Popovian is the vice president of Pfizer Inc. U.S. government relations.

Brendan O’Leary is the general manager of Greenstone LLC, a wholly owned subsidiary of Pfizer Inc.

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