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Blog & Resources Camargo Blog March 25th, 2013

Are 505(b)(2)’s “Super Generics” or What Do We Call Them?

When we started Camargo almost 10 years ago, products approved under 505j were called ‘generics’ and 505(b)(1) ‘new drugs’. We could find no consensus of a name for products approved via 505(b)(2). Of course, when Camargo started business, there had been very few 505(b)(2) products approved. Fast forward 10 years and we have seen an explosion of 505(b)(2) products approved. The looming generic/patent cliff is forcing both generic and innovator pharmaceutical companies to evaluate new sources of revenue and turn to 505(b)(2) products to address some of the gap.

I have attended the Generic Pharmaceutical Association’s annual meetings for several years. At these meetings I have discussed 505(b)(2) product development with the leadership of many generic companies as well as with analysts who follow the industry. A key analyst is Doug Long, VP Industry Relations at IMS. His presentations analyze the US market for trends in sales to assess the health of the generic industry. He has observed that some generic companies have added products approved via both the 505(b)(1) and 505(b)(2) pathways. For the latter, he has used the term ‘branded generics’.

At the CEO Unplugged session at the 2013 GPhA meeting, the CEO’s of the top 5 generic companies were asked by Ronny Gal, Senior Analyst at Sanford Bernstein & Co.: is 505(b)2) in your future? The answer from all CEO’s was affirmative. I believe this is the first use of this term – 505(b)(2), on the podium at any GPhA general session.

The analyst’s issue with the generic companies developing 505(b)(1 or 2) products is that it greatly changes the investor view of the company. 505(b)(1) products present much higher risk and reward than generics. 505(b)(2) products are viewed as lower risk but, to many investors, still a relatively unknown opportunity. But it is clear that 505(b)(1 or 2) drugs require different marketing, sales and have a different financial profile than generics. Perhaps the inclusion of the word ‘generic’ in the naming of a 505(b)(2) somehow adds a bit of obfuscation to the market so as to placate investors.

In a recent article, European authors have upped the ante by calling products approved under the 505(b)(2) or the closely related EU ‘hybrid’ procedure, ‘Super Generics’, while offering “added value generics, new therapeutic entities or hybrids” as alternative names.

My concern about the inclusion of ‘generic’ in the name is that it may greatly restrict the use of 505(b)(2) to changes in US approved new drugs that are off patent. Many readers of this blog know that the 505(b)(2) pathway can and has been used to gain approval of drugs that have never been approved in the US (DESI, NME’s, drugs from outside the US – whether approved or in development, etc.).

Meanwhile Camargo is committed to helping the pharmaceutical industry develop differentiated products using the 505(b)(2) process.



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