NCPA - National Center for Policy Analysis

U.S. Food and Drug Administration Drug Labeling Proposal Needs Improvement

March 13, 2014

A new U.S. Food and Drug Administration (FDA) proposal on generic drug safety labeling needs better analysis, says Todd Nesbit, an affiliated senior scholar with the Mercatus Center.

Nesbit submitted a public comment on the FDA proposed labeling changes for approved drugs (officially, the "Supplemental Applications Proposing Labeling Changes for Approved Drugs and Biological Products" rule).

Currently, Abbreviated New Drug Application (ANDA) holders of approved generics can only change a product safety-related label after the New Drug Application (NDA) holder has had such labeling changes approved by the FDA. The new proposal would allow ANDA holders to submit an application to change its product safety-related labeling even when the NDA holder has not.

  • The FDA argues that this will speed up the communication of drug safety information for generics to doctors and the public. Eighty percent of all prescriptions that are dispensed are generic.
  • However, Nesbit notes that the FDA's analysis does not substantiate its claim that the labeling rule will lead to a positive net benefit, as it provides only qualitative, not quantitative, analysis.
  • Moreover, the FDA greatly understates the estimated costs of the rule and does not account for how ANDA holders may increase resources devoted to post-marketing evaluation and reporting, and to legal concerns in response to increased exposure to product liability suits.
  • Currently, a plaintiff's ability to file "failure to warn" tort suits depend upon whether the drug at issue is brand name or generic, so the benefits of the proposal may in fact be very large if those suits are then expanded to generics. However, the FDA employs a "careless" approach in estimating costs and benefits.

The proposed rule deserves much more thoughtful analysis than that provided so far by the FDA and the proposal should be compared to other reasonable alternatives. As it stands, the analysis of the rule is incomplete, and the public cannot know whether the benefits outweigh the costs until the FDA examines it in greater detail.

Source: Todd M. Nesbit, "Supplemental Applications Proposing Labeling Changes for Approved Drugs and Biological Products," Mercatus Center, March 4, 2014.


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