Breaking News
July 16, 2018 - Parents struggle with what to do when their child has headache, shows study
July 16, 2018 - Outrageous or overblown? HHS announces another round of ACA navigator funding cuts
July 16, 2018 - Weight loss surgery may impact individual’s risk of developing cancer, shows study
July 16, 2018 - Alexion Submits Application for Priority Review and Approval of ALXN1210 as a Treatment for Patients with Paroxysmal Nocturnal Hemoglobinuria (PNH) in the U.S.
July 16, 2018 - Restoring epigenetic balance reinstates memory in flies with Alzheimer’s disease symptoms
July 16, 2018 - Magnetized wire could be used to detect cancer in people | News Center
July 16, 2018 - Non-surgical management found to be feasible option for penetrating kidney trauma
July 16, 2018 - California clinic screens asylum seekers for honesty
July 16, 2018 - FDA Approves Xtandi (enzalutamide) for the Treatment of Men with Non-Metastatic Castration-Resistant Prostate Cancer (CRPC)
July 16, 2018 - Can nanotechnology help treat Alzheimer’s?
July 16, 2018 - Researchers identify protein essential for making stem cells | News Center
July 16, 2018 - Radiologist discusses causes, treatments of varicose veins
July 16, 2018 - Researchers develop nanostructured surface to accelerate wound healing after dental implants
July 16, 2018 - New non-invasive procedure to reposition kidney stones could benefit astronauts
July 16, 2018 - Attending Surgeon Influences Genetic Testing in Breast Cancer
July 16, 2018 - Medical doctors with addictions fear professional repercussions if they seek treatment
July 16, 2018 - 5 Questions: John Ioannidis calls for more rigorous nutrition research | News Center
July 16, 2018 - Researchers find definite increase in scooter-related injuries
July 16, 2018 - Researchers solve mystery of final blood group system
July 16, 2018 - Researchers develop near-infrared fluorophores-based PDT to cure cancer with less side effects
July 16, 2018 - Traumatic brain injury biomarker could help predict patient prognosis
July 16, 2018 - Researchers to investigate role of hormones in mosquito’s ability to use human blood for egg production
July 16, 2018 - AHA: Doctor Makes Lifesaving House Call in His Own Home
July 16, 2018 - Nearsightedness – Genetics Home Reference
July 16, 2018 - Study shows biomarker panel boosts lung cancer risk assessment for smokers
July 16, 2018 - Researchers find link between bereavement during pregnancy, child’s mental health | News Center
July 16, 2018 - Legalizing same-sex marriage has meaningful effects on health care access for sexual-minority men
July 16, 2018 - New York to allow medical marijuana as substitute to opioids
July 16, 2018 - Reducing tapeworm infection could improve academic performance, reduce poverty | News Center
July 16, 2018 - Researchers describe key role of enzyme in regulating immune response against Chagas disease parasite
July 16, 2018 - Johnson & Johnson Announces Publication in The Lancet Highlighting Robust Immune Response to Janssen’s Mosaic-based Preventive Vaccine Regimen for HIV
July 16, 2018 - Do Racial and Gender Disparities Exist in Newer Glaucoma Treatments?
July 16, 2018 - Antibodies may predict transplant rejection risk
July 16, 2018 - New center sets out to stop disease before it starts | News Center
July 16, 2018 - FDA warns consumers about criminals sending fake warning letters
July 16, 2018 - Residential segregation linked with racial disparities in firearm homicide fatalities
July 16, 2018 - UW-Madison researchers develop new method to track Parkinson’s damage in the heart
July 16, 2018 - New approach to cultivate hypoallergenic tomato and strawberry varieties
July 16, 2018 - Smoking associated with delayed shinbone healing
July 16, 2018 - Sheila Dolezal, ‘team player extraordinaire,’ wins 2018 Amy J. Blue Award | News Center
July 16, 2018 - Advanced Prostate Cancer Variant More Common Than Thought
July 16, 2018 - New ways to conquer sleep apnea compete for place in bedroom
July 16, 2018 - Renowned microbe hunter Stanley Falkow dies at 84 | News Center
July 15, 2018 - FDA Slaps Stronger Warnings on Potent Class of Antibiotics, Fluoroquinolones
July 15, 2018 - Don’t let depression keep you from exercising
July 15, 2018 - Student research symposium showcases curiosity and scholarship | News Center
July 15, 2018 - Heavy smokers have increased risk of heart rhythm disorder, shows study
July 15, 2018 - Parents who had severe trauma, stresses in childhood more likely to have kids with behavioral health problems
July 15, 2018 - At colloquium, a range of views on value of predictive algorithms | News Center
July 15, 2018 - Pittcon invites oral and poster presentations for 2019 Technical Program
July 15, 2018 - Virtual reality could offer psychotherapy for fear of heights, study shows
July 15, 2018 - Retooled vaccine raises hopes as a lower-cost treatment for Type 1 diabetes
July 15, 2018 - Kolon TissueGene To Start US Phase III Clinical Trial For Invossa
July 15, 2018 - Study finds prenatal marijuana use can affect infant size, behavior
July 15, 2018 - Howard Chang named HHMI investigator | News Center
July 15, 2018 - Study shows tailored mental health services improve wellbeing of emerging adults
July 15, 2018 - A bright future might help teens steer clear of violence
July 15, 2018 - Stanford Medicine magazine explores the art, science of listening and hearing | News Center
July 15, 2018 - New study tracks how the brain turns simple sensory inputs into meaningful categories
July 15, 2018 - Deadlier subtype of metastatic prostate cancer found to be common than previously thought
July 15, 2018 - UZH scientists identify enzyme that controls cell division
July 15, 2018 - Unhealthy Food Behaviors May Signal Eating Disorder in Teen
July 15, 2018 - Study raises doubts on a previous theory of Parkinson’s disease
July 15, 2018 - Grant awarded to study whether stem cells can treat urinary incontinence | News Center
July 15, 2018 - Imaging techniques may help assess immune system recovery in HIV patients
July 15, 2018 - Machine-learning may aid in diagnosis and treatment of mental health disorders
July 15, 2018 - ‘Skin Cancer, Take A Hike!’ program promotes sun safety and skin cancer awareness
July 15, 2018 - Blink Health announces lowest prices for generic prescriptions through Blue Eagle Health
July 15, 2018 - New drug strategy can alleviate multiple behavioral, cellular deficiencies in FXS mouse model
July 15, 2018 - Georgia State professor receives federal grant to study virus similar to Ebola virus
July 15, 2018 - Quitting Smoking? Even a Little Exercise Can Help You Stay Slim
July 15, 2018 - DBS treatment may slow the progression of Parkinson’s tremor in early-stage patients
July 15, 2018 - 5 Questions: Luby on virus with potential to cause global pandemic | News Center
July 15, 2018 - Corn loses its cancer-fighting phenolic acids when processed into cornflakes
July 15, 2018 - Study uncovers possible link between iron loading, alcohol intake and mortality
July 15, 2018 - Molecular insights of NagA enzyme could help combat TB
July 15, 2018 - The Facts on Tampons—and How to Use Them Safely
July 15, 2018 - Normalisation of ‘plus-size’ risks hidden danger of obesity, study finds
July 15, 2018 - $2.5 million award to support physician-scientist training | News Center
July 15, 2018 - Aeras announces publication of Phase 2 results of two TB vaccines
Price competition for generic drugs linked to increase in manufacturing-related recalls

Price competition for generic drugs linked to increase in manufacturing-related recalls

image_pdfDownload PDFimage_print
Credit: CC0 Public Domain

Researchers from three universities have found that extreme price competition in the generic pharmaceutical market—designed to make medications more affordable—may be putting more patients at serious health risk, as evidenced by a higher number of product recalls caused by manufacturing-related problems.

The same research, published online today in the Journal of Operations Management, also raises concerns that generic drug makers may be underreporting discretionary recalls due to competitive pressures.

“Extreme price competition in the generic pharmaceutical market has some unexpected risks that regulators and lawmakers may not have foreseen when pushing for cheaper drugs,” said George Ball, assistant professor of operations and decision technologies at the Indiana University Kelley School of Business and the study’s lead author.

“There’s a downside to cheaper drugs: You can’t guarantee that they’re going to be of the exact same quality,” Ball said. “This research demonstrates that regulators and insurers may want to temper their intense public pressure placed upon pharmaceutical companies to bring prices down. Such pressure may come at a cost: poorly manufactured drugs.”

Other authors of the paper are Rachna Shah, associate professor of supply chain and operations at the University of Minnesota’s Carlson School of Management, and Kaitlin Wowak, assistant professor in the Department of Information, Analytics and Operations at the University of Notre Dame’s Mendoza College of Business.

The researchers assessed the impact of the Drug Price Competition and Patent Term Restoration Act—commonly called the Hatch-Waxman Act—which was intended to increase competition in the pharmaceutical industry and lower drug prices by expediting the approval process for generic drugs. The process has led to a considerable increase in the number of generic drugs entering the marketplace since its passage in 1984.

It’s generally believed that generic drugs are of equivalent quality to the original pioneer drug because they have the same formulation and because generic manufacturers are audited by FDA regulators to the same manufacturing quality standards. But the authors’ study of 939 recalls at 64 firms over a 12-year period found that generic drug companies facing more product competition have more serious Class 1 and 2 manufacturing recalls. These are the recall classes designated by the FDA that may cause death or medically reversible harm to the customer.

While generic drug makers are not allowed to change the design of the product, they have considerable leeway regarding manufacturing decisions.

“This may explain why firms producing a higher proportion of generic products may have higher rates of recalls,” Shah said. “These decisions may include reducing labor costs, hiring less experienced employees or lowering maintenance costs by servicing manufacturing equipment less often. Firms may also respond to intense competition by purchasing lower-cost ingredients.”

Ball, Shah and Wowak used data from the FDA’s annual Orange Book, which contains all approved pharmaceutical products for sale in the U.S. and classifies whether a drug is a new drug application (NDA) or an abbreviated new drug application (or a generic). They compared its information with recall data from 2002 to 2014.

“Our results demonstrate that as product competition increases, manufacturing-related recalls increase,” Wowak said. “This is particularly evident when firms are encouraged to compete on product price, are free to set prices, and the design of the product is unalterable.”

The professors also found that the relationship between product competition and manufacturing-related recalls is not universal but is contingent upon managerial discretion. This finding may indicate that while price competition via more generic drugs leads to more serious manufacturing problems in the production process, it may also encourage managers not to announce recalls when they have discretion.

They believe that their findings suggest the need for changes in processes used by the Food and Drug Administration. These include requiring more detailed and precise documentation about how the generic drug will be produced and how stringently the manufacturing plants that product generic pharmaceuticals are inspected.


Explore further:
FDA names drugmakers accused of blocking cheaper generics

More information:
George P. Ball et al, Product competition, managerial discretion, and manufacturing recalls in the U.S. pharmaceutical industry, Journal of Operations Management (2018). DOI: 10.1016/j.jom.2018.04.003

Provided by:
Indiana University

Tagged with:

About author

Related Articles