Evaluating the Impact of Generic Drug User Fee Amendments (GDUFA) on Time to Entry of Generic Competitors Accounting for Ordering

Background

Generic drugs can bring more competition to the market and help to control drug costs. Governmental pharmaceutical policies operate to balance innovation and access, and to encourage more generic entries to provide more competition. In 2012, a five-year program called the Generic Drug User Fee Amendments (GDUFA) was enacted. By charging new generic applicants a user fee, GDUFA aims to speed access to generic drugs and therefore bring a quicker drop in drug price. Since the scale of average price reduction is bigger after second and third generic entries, we evaluate the impact of GDUFA with a focus on the time to entry for different orders.

Methods

We identify the order of generic entry for each branded drug using drug approval and exclusivity information from the Approved Drug Products with Therapeutic Equivalence Evaluations database between October 2007 and September 2017. We distinguish between generic entry with and without patent challenge for the first entrants. The Andersen-Gill (AG) model, Prentice, Williams and Peterson (PWP) model with total time (TT), gap time (GT) and conditional frailty model are applied to study the time to entry for generic drugs impacted by GDUFA, adjusting for administration type, therapeutic class, competition from authorized generics, index year, generic manufacturer size, whether branded drug has Risk Evaluation and Mitigation Strategy (REMS) status, and whether there is product-specific guidance for generic drug development. We estimated the impact of GDUFA on different orders of event. Count model and logit model are also applied to study GDUFA’s impact on number and likelihood of generic entry.

Results

Survival analysis result from PWP-GT suggests that there’s a decrease in time to entry for first entrants entered without patent challenge, with a hazard ratio of 1.24 (95% CI 1.01 to 1.49). However, for the subsequent numbers of entry, there is a slowing down in speed post-GDUFA. The hazard of second entrants since first entry is 0.39 (95% CI 0.29 to 0.51) comparing post- to pre-GDUFA, and 0.36 (95%CI 0.26 to 0.49) for third entrants after second entry. For generic entries after the first entered with patent challenge, such increase in time to entry is present for second entrants, but not statistically significant for third entrants. Similar results were found in AG as well as PWP-TT models. Conditional frailty model is also applied to account for unadjusted heterogeneity such as market size, but the conclusions remain consistent. Authorized generics from branded drug companies slowed down entry for drugs entered after patent challenge, as they act as competitors to discourage entry. Branded drug with REMS will deter generic entry, while product-specific guidance for generic drug application accelerates generic drug entries. Negative binomial regression results indicate a decrease in the average number of generic competitors per branded drug post-GDUFA, while logistic regression suggests the likelihood of receiving any generic competition and getting patent challenge both increases after the enactment of GDUFA.

Conclusion

Initial findings suggest that GDUFA has some positive effect on generic competition, but more on the extensive margin rather than intensive margin.