Costs and Benefits of Generic Drug Regulation


Synapse critiqued industry claims that a small, sensible change in Food and Drug Administration (FDA) regulations will add billions of dollars to the costs of prescription drugs. Currently, generic drug producers are required to use exactly the same label and warnings as the brand-name version of the same drug; the Supreme Court has held that, as a result, the generic producers cannot be held liable for failure to warn their customers of known drug hazards if the warnings do not appear on the brand-name label. Generic drugs account for most prescriptions filled in the U.S., and brand-name production often ceases when generics enter the market. This often means that the brand-name label, and hence the identical generic labels, are no longer updated when new information is discovered about drug hazards.

FDA proposes to change its rules to allow generic drug producers to update their own labels. The drug industry claims this will cause huge increases in the cost of generic drugs. At the request of the American Association for Justice (AAJ, formerly the American Trial Lawyers Association), Synapse evaluated the costs and benefits of generic drug regulation, and critiqued industry arguments against the FDA rule change.

Project completed March 2015