Generics and Pricing

J0385339 I almost missed this from the FDA. 

It is common knowledge that generic drugs usually mean a lower price for a chemical therapy.  That is why the Hatch-Waxman Act exists.  However, a study released by the FDA on April 4, 2006 is interesting from two angles. 

First, it demonstrates in chart form that the more generic manufacturers produce a chemical product, then the lower the price.  That makes market sense, of course, but the chart is nonetheless worth looking at it because it quite graphically demonstrates the drop in price.  Entry of the first generic onto the market appears to lower the price by 6%.  However, a second generic lowers the price by a whopping 48%.  By the time you get to 19 generic manufacturers, the price is only 6% of what the brand name drug was before there were any generics.

But the study is also interesting from the perspective that the FDA released a study about price.  One usually associates the FDA with concentrating on matters of science, not price.  In fact, during advisory committee meetings, when the topic of price comes up, it is almost universally discouraged and dismissed by the AC chair as being outside the purview of the FDA. 

Why then, when the FDA is under so much pressure to demonstrate agility in protecting public health, are they using resources to address the issue of price?  For this, I have no answer. 

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