rymat inc.: a look at generic vs. brand pharmaceuticals

Generic vs. Brand‐Name Drugs: How much are you really saving?

Is it worth the risk?Risk?



What happens when a brand name goes generic?

What happens when a brand name goes generic?

• At the end of an approximately seven-year period of exclusivity, the FDA allows one specific generic to be the first to market.

• That generic is given a period of time of exclusivity for about six months.

• At the end of that time period, any manufacturer that can prove that it can achieve the same drug concentrations in the blood that the brand name does can make a generic.

• Manufacturers of generics aren’t required to do studies in people to prove safety. It is assumed that if they can achieve same blood concentration, they will achieve same results.

Do generics have to have the same formula, effect, side effects?


• The generics have to have the same number of milligrams of drug that is included on the label in the pills.

• In addition, the drug needs to get you within 10 percent above or below the blood concentrations achieved with the brand for the FDA to approve the generic, and in reality, they only usually vary by 3-4 percent in one direction or another.

• It is possible that one generic will get you a 3 percent lower concentration than the brand and another can get you a concentration that is 3 percent above the brand and therefore the two generics can be 6% different from each other.

• Most people will never notice a difference.


• According to the FDA, generic drugs do not need to contain the same inactive ingredients as the brand name product.

• Inactive ingredients are those that have nothing to do with the therapeutic action of the drug; binding materials, dyes, preservatives, and flavoring agents.

• That’s why sometimes a drug you have been taking will suddenly look different.

• It usually means a different manufacturer has made that pill than the one you had before.

• Also, given individual variations, a person can have an allergic reaction to an inactive ingredient in one generic and not another.

But are all generics really created equal?


• Not exactly. • The FDA actually assigns letter grades when approving generics: An “A” means the drug is exactly the same as the once-

patented drug it's mimicking, while a “B” might vary slightly in how it’s absorbed by the body. • This information usually isn’t part of the drug’s literature;

patients would have to ask the pharmacist for it. • The agency also allows the generics' concentration of active

ingredient in the bloodstream to be as much as 20 percent below or 25 percent above the brand's—a fairly wide window of variability.


• The FDA’s policies also mean a drug’s bioequivalence doesn’t actually have to be exactly equivalent:

• When drug companies lose exclusivity to manufacturing, they release the drug’s recipe, but not how to make it.

• That’s left for the generic suppliers to figure out. And they don't always get it right.

• Eight out of 10 prescriptions written in the United States are filled with the no-brand name, generic version of the drug prescribed by a doctor, and every year generic drugs save American consumers more than $200 billion in prescription costs.

• Global generic spending is set to double by 2016 reaching 400- $500 billion.




Is it worth the risk?

Risk?

Beware the Risks of Generic Drugs

Copies aren't always as good as the original


• In 2002 the FDA acknowledged it did not have the resources to adequately monitor foreign manufacturing.

• This became especially alarming when FDA Commissioner Margaret Hamburg, MD, acknowledged that 80% of active pharmaceutical ingredients (APIs) come from foreign sources.


Bloomberg Expose:

This study revealed that a number of major generic drug manufacturers in India systematically fudged data.

Bloomberg News (Dec. 3, 2014)

http://www.bloomberg.com/news/2014-12-03/indian-labs-deleted-test-results-for-u-s-drugs-documents-show.html


Bloomberg Expose:

Sun Pharmaceutical Industries, Ltd.• According to Bloomberg, the company deleted bad test results. • Chemical analysis (chromatography) of drug samples is essential to establish

purity. • If the test results are not up to standards, the entire batch of medication is

supposed to be thrown out. • But Bloomberg reported that a quality-control worker at Sun Pharmaceutical

merely hit the delete button on the computer to get rid of the unwelcome results.

• As a result, a batch of medications was shipped to the U.S. that probably did not pass quality control measurements.


Bloomberg Expose:

In 2013, Sun acquired Ranbaxy Laboratories


Bloomberg Expose:

• Ranbaxy admitted it falsified data and paid $500 million in fines “to resolve claims that it sold subpar drugs and made false statements to the Food and Drug Administration about its manufacturing practices at two factories in India”

• Ultimately, Ranbaxy was barred from exporting drugs to the United States from its Indian manufacturing plants.

New York Times, May 13, 2013

http://www.nytimes.com/2013/05/14/business/global/ranbaxy-in-500-million-settlement-of-generic-drug-case.html?_r=0





Other Problems in India

Bloomberg Expose:

“A review of FDA documents by Bloomberg News found that similar actions on quality tests have happened at dozens of other companies’ plants across India that make drug ingredients and pills for export to the U.S.”

Beware the Risks of Generic DrugsOther Problems in India

• There are 600 FDA-registered drug companies in India. • They are spread out all over the vast country, but there are only 12 FDA

inspectors. • Not surprisingly, they have only visited a fraction of the factories. • They usually have to announce well in advance that they are coming,

which to our way of thinking defeats the purpose of such inspections. • In the U.S., all FDA inspections are unannounced so that the company

cannot try to clean up its act in advance.

• Over the last five years the FDA has banned products from 44 different Indian drug-making facilities.

• That should give insurance companies some cause for alarm when they insist that their customers must use generic rather thanbrand name drugs.


• The FDA reprimanded the Indian drug manufacturer Wockhardt for hiding unwelcome test results and deleting data.

• This is not the first time Wockhardt has run into trouble. • Since April of last year the company has recalled hundreds of millions of tablets and

capsules. • They included popular blood pressure medicines such as amlodipine and lisinopril as

well as the antibiotic azithromycin and the sleeping pill zolpidem.• Wockhardt is not the only Indian pharmaceutical firm to run afoul of the FDA. • Other Indian companies that have received warning letters over the last several

months include Aurobindo, Dr. Reddy’s Laboratories, and IPCA



• India is not the only place that is coming under increased scrutiny by the FDA.

• For years, the agency only had a few inspectors on the ground in China.

• Now that there are more, they are discovering shortcomings in Chinese

plants too.


What about China?

What about China?

Beware the Risks of Generic DrugsWhat about China?


What about China?

• The FDA has recently sent a slew of warning letters to a number of companies in recent months.

• Even brand name companies have been tainted. Pfizer’s Chinese partner, Zhejiang Hisun, was accused of systemic problems associated with “data manipulation.”


What about China?

Chinese Drug Imports from Problem Plants:

• In the last few years the FDA has increased the number of inspectors it has on the ground in India and China.

• It hasn’t been easy. FDA inspectors have had a hard time getting visas to enter China.

• Unlike the unannounced inspections that occur in the U.S., the FDA must alert officials in China and India that they are coming well in advance of a visit.


What about China?Chinese Drug Imports from Problem Plants:

• There has been out-and-out fraud, where companies have been found to fabricate data.

• In other cases there has been poor quality in manufacturing.



• In the case of one of China’s major drug exporters, Hisun, the FDA revealed that there had been “broad data manipulation” at its factory in Taizhou.• The FDA conducted its inspection of Zhejiang Medicine Co’s

Xinchang Pharmaceutical Factory in Shaoxing, Zhejiang in June of 2015.

• The FDA in a warning letter said that the employees plant routinely performed “unofficial analyses” that they they kept out of the official quality control records for its APIs.



• Shanghai Desano, which is working with GlaxoSmithKline’s ($GSK) ViiV Healthcare, was inspected in May by the FDA, which criticized the facility for conducting “unofficial” tests of drug batches that it kept out of its official record.

• The FDA found 8,400 unofficial chromatographic analyses at the Desano plant performed between 2012 and 2014.

• The company has acknowledged that some of those tests related to out-of-spec test results.



• In the case of Chongqing Lummy Pharmaceutical, the FDA inspected two plants in March.

• The warning letter slams the drugmaker for widespread and serious data manipulation of batch analyses.

• It found that the company routinely retested samples without justification and deleted raw analytical data from computerized systems that did not provide the results that were needed.

Beware the Risks of Generic DrugsWhat about China?Chinese Drug Imports from Problem Plants:

• In one egregious case, the FDA said on March 4, 2016, an analyst set the gas chromatography personal computer clock back to make it appear as if testing had been done in August 2015, 7 months earlier. • The analyst then performed 5 injections to produce falsified results for long-term stability for a finished API lot, deleted four and reported only the results of the final injection as passing in the quality-control data package. • That was the test the quality unit then relied on to determine if the lot was within specification.

Cheap Drugs May Be No Bargain


• “Made in America” used to be both a sign of quality and a source of pride. • But Americans care much more about saving money. That’s why

so many of our consumer products—from clothes to electronics to toys—are coming from China and other low-wage countries.

• We’ve learned the hard way that such products may not always meet safety standards.

• Lead in toys, for example, has led to a number of recalls.• Toothpaste contaminated with antifreeze alarmed Americans

for a few weeks, but not enough to change buying habits.

• Most people assume that their medicines are still made in America.

• Nothing could be further from the truth. Experts estimate that 80 percent of the active ingredients in our prescription drugs come from abroad.

• Increasingly, this means India and China.

• The former head of China’s Food and Drug Administration was executed a few months ago because he accepted bribes from the companies he was supposed to be overseeing.


Cheap Drugs May Be No Bargain• Don’t count on our FDA to protect you, though. • The U.S. watchdog agency doesn’t have the budget or the

manpower to inspect more than a handful of the hundreds of manufacturing plants in Southeast Asia.

• This year the FDA only plans to visit 13 out of 714 drug firms in China.

• Often, FDA officials don’t even know where to look. • Some senior FDA officers have said there are 2,100 companies

that would need inspection. • The Government Accountability Office estimates that nearly

7,000 companies will export pharmaceutical materials into the U.S. in 2007.


• The intense competition among generic drug makers and their search for the cheapest raw materials has driven the huge increase of imports.

• The same motivation drove pet food manufacturers to purchase wheat gluten contaminated with melamine from China.

• We worry that the FDA cannot guarantee the safety of these inexpensive pharmaceutical products any more than they could protect our pets.

• The FDA is still struggling with safety issues. • Until it is adequately funded so that it can

monitor ingredients from places as far away as China, Americans will wonder about the safety of their food and drug supply.


• Insurance companies often establish favorable relationships with certain drug companies.

• That means that those firms’ medicines are included on the approved list, while others are left off.

• If the doctor writes a prescription for a drug that is not on the list, the co-pay can be $50 or more each month.

• In some cases, patients may have to pay for the entire cost out of pocket.


• The new Medicare Plan D program providing prescription drugs for senior citizens is full of such pitfalls. • An insurance company may have only one or two drugs in a

particular category.

• It’s a travesty when, instead of your doctor, bureaucrats who know nothing about your specific medical history make decisions about the drugs you should take.

• Individuals should use the medicine that works best for them, with the fewest side effects.

• That does not always correspond to the insurance company’s objective to save money at all costs.


• Generic drugs are frequently offered as a solution to the high cost of prescription medicine.

• They are supposed to be identical to their brand name counterparts.

• But how good are they, really?

Thank You!

rymat inc.: a look at generic vs. brand pharmaceuticals

Health & Medicine