This article is part of our special focus on "traditional" pharma: The Small Molecule Manufacturer (read more here). You can find more articles from The Small Manufacturer here.
The Association for Accessible Medicines is a Washington DC-based trade association that represents generic drug and biosimilar manufacturers. We advocate for policies to ensure that patients have access to safe, effective and affordable medications. Our members are manufacturers, and we regularly engage with them for policy and legislative proposals regarding healthcare and prescription drug costs, and FDA issues. We start from the premise that no medicine is effective if patients cannot access it.
For me, it has always come down to the importance of patient access. I am a true believer in the value the pharma industry provides – both in terms of new medicine development and the competition among manufacturers that increases overall accessibility and affordability. We're actually celebrating the 35th birthday of landmark legislation known as the Hatch-Waxman law (officially, the Drug Price Competition and Patent Term Restoration Act), which created our modern pathway for generics in the US market. This single act has allowed the industry to deliver hundreds of billions of dollars of savings every year to the US healthcare system. Remarkably, over the last decades, the total saving has grown to nearly $2 trillion, which is an astounding value proposition unseen in any other area of healthcare.
In early 2015, I was contacted by the AAM (known then as the Generic Pharmaceutical Association) as part of their global search for a new CEO. I had been in the industry for about 20 years at the time, but all my experience had been on the branded side, and it didn’t seem like an obvious fit.
That said, when I sat down with the Association board, I was immediately struck by their desire to increase the sector’s visibility and relevance in the public policy debate. Now, as a result of a lot of hard work and dedication by our members and our team here at AAM, the generic industry and biosimilar sector are poised at the crossroads of innovation, accessibility and affordability. That makes this a great industry to represent.
There are three major challenges affecting patients’ access to affordable medicine. The first is the supply chain. Generics are supposed to win by functioning effectively. They essentially serve as a commodities market, and such markets need many buyers and sellers to operate efficiently. However, the last two decades of buyer consolidation in the US have led to just three wholesalers now controlling about 90 percent of the generics market. That consolidation has been a major factor in driving generic prices down over the last several years. On one hand, this can be deemed a positive, but if prices in the US market are deteriorating to levels at or below the cost of manufacture, we run an increased risk of drug shortages and reduced competition as individual manufacturers choose to exit certain markets.
Number two is the increased aggression by certain product originators. They may deny selling legitimate drug samples to a generic manufacturer to prevent necessary research and testing to file a drug application with the FDA and ultimately bring a competitor to the market. In addition, increasingly in the US we are seeing generic drugs listed on insurance plan formularies requiring either the same or even a higher copay or co-insurance than the more expensive brand-name drug. In such cases, why would patients ever want to switch to the less expensive medicine, when in actuality it is not less expensive to them? And over time, if this practice of preferring a branded drug to a generic on a drug formulary continues, generic manufacturers will reassess whether to continue developing medicines designed to increase access and lower costs, if those lower costs are not being realized by patients.
The last area of concern is the political and policy environment. There's a lot of understandable anxiety and agitation about drug costs among all stakeholders. Ironically, the majority of prescription drug costs in the US have been dropping while worries over rising costs have increased, creating a challenging environment where leaders in government may come to think that generics are somehow responsible for increased drug costs, when the exact opposite is true.
When I started with AAM, I knew the industry wasn’t necessarily satisfied with its voice and relevance in the public policy debate. The data showed that generics constituted an overwhelming percentage of total prescriptions for a very small amount of total costs. We had a lot of important communication and messaging work to do. Over the past four years, we've been able to secure Administration and Hill buy-in to the fact that generics are an essential part of any solution to control drug costs, particularly specialty drug costs.
In 2017, we had an extremely important victory in the reauthorization of the generic drug and biosimilar user fee agreement – a major factor in ensuring the FDA has the resources to conduct timely reviews of generic and biosimilar applications. And with regard to drug samples being denied to generics makers, we're confident that our recommendations will be part of the policy solution if Congress passes reforms. Likewise, manufacturer competition is gaining traction as an issue on Capitol Hill.
I’ve had a number of mentors in my life, starting with my father. I’m his namesake, and I've always felt he was the greatest man I've ever met. Among many business leaders and industry CEOs, one that comes to mind is David Brennan – the CEO of AstraZeneca when I worked there. He taught me to balance the commitments of running a successful business while also seeking to advance patient access to medicine. I've been exposed to many successful people in my career, and I am currently surrounded by so many I am fortunate enough to call colleagues at AAM. When you get to see them perform like I do, it's very motivating.
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