U.S. HOUSE COMMITTEE SHOULD ADVANCE Q1/Q2 REFORMS TO PROMOTE GREATER COMPETITION AND HELP LOWER PRESCRIPTION DRUG PRICES

Lawmakers Should Advance Bipartisan, Market-Based Solution to Crack Down on Anti-Competitive Tactic Used by Big Pharma to Extend Exclusivity, Keep Drug Prices High

This morning, the U.S. House Committee on Energy and Commerce will hold a markup on bipartisan legislation that would increase transparency in generic drug applications (H.R.1843). This bipartisan, market-based solution would reform the Q1/Q2 sameness requirements from the U.S. Food and Drug Administration (FDA) that Big Pharma abuses to extend exclusivity, promoting a more efficient and streamlined generic drug approval process.

The legislation, sponsored by U.S. Representatives Neal Dunn and Kevin Mullin, was re-introduced this Congress to help foster greater competition from more affordable generic alternatives to high-priced brand name drugs. Companion legislation (S.1302) in the U.S. Senate, sponsored by Senators Maggie Hassan, John Hickenlooper, Mike Lee, Rand Paul and James Lankford, is currently before the Committee on Health, Education, Labor and Pensions (HELP).

According to the nonpartisan Congressional Budget Office (CBO), this solution would deliver more than $1 billion in savings.

More on Q1/Q2 Reforms

One way Big Pharma games the system to block competition from more affordable alternatives to high-priced brand name drugs is by abusing a process known as “Q1/Q2 sameness.” This refers to a requirement from the FDA that “generic drug manufacturers mimic the brand-name drug formulation for certain formulations” so that these drugs are “Qualitatively the same, or Q1,” meaning they contain the “same inactive ingredients,” and that they are also “Quantitively the same, or Q2,” in that they have “essentially the same concentration” of these ingredients.

The problem arises in the fact that brand name drug makers can assert “trade secret protection” around many of the products generic drug makers are attempting to copy, meaning generic drug manufacturers have to “essentially play a protracted guessing game with FDA,” as Association for Accessible Medicines (AAM) CEO John Murphy III put it in a June 2024 column. Murphy added, this leads to “a lot of spilled ink, wasted resources and unnecessary red tape,” and has “delayed generic competition, and in particular competition for critical complex products—a growing category of medicines that have complex active ingredients, formulations, or routes of administration—that are frequently expensive and desperately require generic competition.”

A prominent example is brand name drug maker Allergan’s dry eye drug Restasis. According to Murphy, “[i]t took FDA nine years to approve a generic version of Restasis because of asserted formulation trade secret claims by the brand-name manufacturer, Allergan. During that time, U.S. patients and payers were shelling out a lot for the extraordinarily expensive brand-name drug even though the relevant patents on Restasis had long been invalidated or expired.”