Providers and patients still awaiting benefits from boost in generic approvals

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Alexander Gaffney Senior Manager, Health Research Institute, PwC US October 18, 2019


Generic drug companies are benefiting from record numbers of generic drug approvals, but there’s little evidence the approvals are resulting in lower prices or greater availability of drugs experiencing shortages, according to a new study published in JAMA Network Open.

The FDA has established several new pathways and incentives for generic drug companies to bring new products to market more quickly in recent years. Some of these include faster approvals, more staff to help eliminate backlogs and new market exclusivity for competitive generics.

After looking at 1,832 generics approved between July 2016 and December 2018, the study found that, while the FDA’s package of reforms has led to record approvals, it hasn't resulted in a significant increase in generic competition for drugs without adequate competition, nor a decrease in shortages compared with historical baselines.

HRI impact analysis

For healthcare providers and insurers, the lack of sufficient new generic competition may provide increased incentives for them to disrupt the generic market themselves. For example, some hospital systems have teamed up to make drugs that are chronically in shortage situations.

The new research likely is indicative not of a failing by regulators, but of the difficulty of using generic competition as a means of controlling for cost. While generic approvals may be increasing, most approvals likely would have occurred anyway, such as for high-dollar-value drugs coming off patent. For some approved drugs, competition may already exist. According to the study, 79.6 percent of all generic approvals were for drugs with more than three marketed competitors at launch.

Other research published by the Association for Accessible Medicines, the generic drug trade group, offers further insight into why generics may not be a panacea for drug prices. Of the 729 generic drugs approved in 2018, just 551 are actively marketed. Twenty-nine percent of the 2,136 generics approved in 2016-18 had not been marketed.

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Contact us

Trine K. Tsouderos

HRI Regulatory Center Leader, PwC US

Tel: +1 (312) 241 3824

Alexander Gaffney

Senior Manager, Health Research Institute, PwC US

Tel: +1 (202) 836 1604

Crystal Yednak

Senior Manager, Health Research Institute, PwC US

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