Market evolution of new drug formulations Posted 01/04/2019

Brand-name drug manufacturers sometimes create modified versions of their approved drugs which can include new strengths, dosage forms, or delivery routes. This product modification can meaningfully increase patient treatment options; however, some cases have come under scrutiny as they do not offer any clear therapeutic advantages. This second practice is a form of ‘product hopping’, a method used by manufacturers to prolong revenue streams related to market exclusivity. Complementary strategies such as product discontinuation can augment the impact of product hopping.

Beall and colleagues sought to determine how frequently manufacturers create new formulations of approved drugs and the timing of generics entry for those new formulations [1]. They used the publicly available online database Drugs@FDA to retrospectively trace new formulations of small-molecule drugs first approved in 2002 (reference products) that manufacturers introduced over the following 15 years. The year 2002 was used to account for the average market exclusivity for new drugs, which is between 12 and 14 years.

Seventeen reference products indicated for a range of conditions met the inclusion criteria. Of these, nine (53%) were linked to 21 new formulation products, representing an average of 1.4 (median = 1, interquartile range = 0¬−2) new formulation products per reference product. These 21 new formulation products comprised new strengths (5, 24%), dosage forms (3, 15%), co-formulations (5, 24%), or combinations of these modifications (8, 40%).

Of the 21 new formulations, most (11/21, 53%) were introduced during the first five years of the observation period, i.e. during the New Chemical Entity exclusivity period, 3 (14%) were introduced over the following five years, and 7 (33%) over the final five years. Since the period immediately post-approval is when manufacturers can charge higher prices and are likely to have the least amount of competition, expanding the population of patients eligible to take a drug as widely as possible during this period by introducing new formulations makes economic sense.

New formulations can provide manufacturers with additional years of market exclusivity beyond when generic drug entry occurs for the reference product. For reference products in this study, generic drug entry occurred an average of 12.2 years after approval. For first new formulation products (n = 9), generic drug entry occurred 8.8 years after their approval, for second new formulation products (n = 7) an average of 6.5 years, and for third new formulation products (n = 3) an average of 6.0 years. On average, the market exclusivity time accumulated by all new formulation products beyond the time of generic drug entry for their respective reference products was 1.2 years.

Of the nine product portfolios that included new formulation products, six experienced generic drug entry for the reference product during the study period. For three of these, generic drug entry for all reference products occurred simultaneously to their respective reference products while for the other three, generic versions of reference products were approved before generic versions of new formulation products.

Numerous product lines were voluntarily discontinued during the 15-year observation period, including three reference (18%) products and five new formulation (24%) products. These discontinuations all occurred before generic drug entry. In three cases, voluntary discontinuation of the initial formulation occurred as generic drug entry approached, possibly signalling that the brand-name manufacturer was attempting to delay generic drug entry by forcing patients to switch to new formulations protected by later expiring patents, resulting in longer market exclusivity. This practice of introducing new versions of products and later discontinuing some of them during the exclusivity period is disruptive to patient care.

The findings of this study indicate that a considerable proportion of novel drugs were developed into new formulations with the purposes of patient benefit and prolonging market exclusivity. With replication in other cohorts of drug approvals, the results of this study could encourage policymakers to re-examine product hopping practices and put in place measures to ensure that adequate incentives exist for reasonable formulation innovation and timely entry of generic drugs.

Conflict of interest
This work [1] was funded by the Laura and John Arnold Foundation. Kesselheim and Sarpatwari also receive support from the Harvard-MIT Center for Regulatory Science and the Engelberg Foundation. Beall has nothing to disclose.

Related article
Strategies used to delay or prevent access to affordable generic drugs in the US 

1. Beall RF, Kesselheim AS, Sarpatwari A. New drug formulations and their respective generic entry dates. J Manag Care Spec Pharm. 2019;25(2):218-24.

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