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Posted July 12, 2017


Recently the FDA released new draft guidance establishing an expedited process for the review and approval of high-priority generic drugs. According to PwC’s Health Research Institute, the June announcement and subsequent guidelines are expected to decrease the standard approval process by months. Meaning some generic drugs have the possibility of getting to the market faster, which should create more competition and potentially lower drug prices. 

New Process Outlined

The new guidance is ahead of schedule as it was expected under the upcoming Generic Drug User Fee Act reauthorization, which probably won’t be signed into law for a few months. The draft involves the pre-submission facility correspondence (PFC) process, which outlays the information a generic medicine’s sponsor must submit to the FDA and the timeline for approval. If the generic drug meets the “high priority” FDA criteria, regulators now will move to expedite the review process – conducting earlier facility inspections and reviewing an approval application in less time.

Related: How Insurers Are Working to Combat Rising Prescription Costs

Consumers More Aware of Drug Prices

Rising drug prices have garnered media attention as well as public and political scrutiny over the past several years. In fact, according to a 2017 HRI survey, almost 70% of consumers feel that a pharmaceutical company should not be allowed to charge indiscriminately for a medication – two years earlier only 52% of consumers felt that way.

Related: HDHPS Create Need for Accurate Price Transparency Tools

Pharmacy Costs for Employers on the Rise

And while medical cost trend is anticipated at a relatively low 6% for employers in 2018, pharmacy costs are likely to take up the largest portion of their spending. Therefore, a key strategy that employers have utilized is replacing branded drug purchases with generics through the use of formularies and incentives. It’s a path worthwhile taking as according to the IMS Institute for Healthcare Informatics, generic drugs saved the U.S. healthcare system $1.68 trillion from 2005 to 2014.

Related: Three Tactics for Controlling Future Health Plan Costs


The new FDA guidance is one of several activities they are taking to decrease regulatory barriers to entry for generics. Understanding the climate is dictating the need for competition and lower drug prices, the FDA is also looking at more ways to balance innovation and access to generic medications. Consumers and employers will continue to be vested in this process as it directly impacts their bottom-line.

Source:  PwC HRI: Medical Cost Trend: Behind the Numbers 2018. June 2017.

WEX Health

WEX Health