An authorized generic (AG) is a drug that is sold by the brand manufacturer, or innovator company, with both brand-name and generic labels.
Authorized generics differ from regular generics in that they are identical to the brand or legacy product in both active and inactive ingredients. Generic drugs need have only the identical active ingredients as the branded drug. Innovator companies do not have to re-apply for U.S. Food and Drug Administration (FDA) approval of an authorized generic.
Authorized generics are designed to compete with generic competitors to the brand drug on price, quality and availability once the brand drug patent expires.
Controversy Over Authorized Generics
Because authorized generics are exempt from the 180-exclusivity period granted to the first approved generic to challenge a branded drug, some legal experts suggest authorized generics could threaten the generic industry and undermine the intent of the Hatch-Waxman Act which paved the way for generic competition.
The Generic Pharmaceutical Association (GPhA) supports proposed legislation that would prohibit the marketing of an authorized generic during the 180-day generic exclusivity period following a patent challenge. "Ultimately, consumers pay the price as brand companies keep drug prices high and access to affordable medicine is delayed," according to a GPhA statement.
The FDA has distanced itself from complaints that authorized generics pose an unfair trade practice. It states, "Generic drug companies, through citizen petitions and lawsuits, have sought FDA’s intervention to halt the marketing of authorized generics. FDA determined, and the courts upheld, that the FD&C Act does not give FDA authority to intervene in the matter."
The FDA maintains a list of authorized generic drugs submitted to the FDA since January 1, 1999 by sponsors of new drug applications.
Examples of authorized generics found on the list include Addrerall XR, a treatment for ADHD. The drug's sponsor, Shire Pharmaceuticals Inc., applied for a new drug application (NDA) for its six dosages of the medication. The generic versions of Adderall XR entered the market between April 1, 2009 and October 1 2009. GlaxoSmithKline introduced its authorized generic version of 150 mg Zyban, a drug approved for smoking cessation, on May 5, 2004. The company ceased marketing the AG of Zyban on March 16, 2009.
