The US Generic Drug Supply Chain: “Standardized, Transparent & Dynamic”


Chip Davis is head of the Association for Accessible Medicines (AAM) which advocates for greater uptake of generic and biosimilar drugs in the USA. Here, Davis argues that the generics supply chain is standardized, transparent and dynamic, helping save the US healthcare system trillions of dollars.


Savings have totaled USD 2 trillion in the last decade, thanks to the availability of low-cost generics – USD 293 billion in 2018

Newly released data confirms that generic drugs save Americans and the US healthcare system more money with each successive year. Savings have totaled USD 2 trillion in the last decade, thanks to the availability of low-cost generics – USD 293 billion in 2018. The Association for Accessible Medicines will soon publish the 11th annual edition of our Savings and Access Report, breaking down the savings from generics and biosimilars by state, condition and more.

These savings are only possible because of the scrupulously maintained commitment to quality, safety and efficacy throughout the generic drug supply chain. Manufacturers that are members of AAM adhere to a code of business ethics that upholds these priorities.

As science advances and the economic and regulatory environment grows more complex, the supply chain must adapt to ensure Americans get the medications, including the latest innovations, that they need to stay healthy and productive. Similarly, the US Food and Drug Administration (FDA) continues to evolve as it provides regulatory oversight. This standardized, transparent and dynamic system is working for doctors, pharmacists and their patients.



Exacting standards ensure the reliability of the medicines we take. These standards make it possible for us to trust that a pill dispensed from a pharmacy in Oregon in the spring will match, in every way that matters, a pill picked up at a drug store counter the following winter in Miami.

Dr Jeremy Greene, professor of medicine and the history of medicine at Johns Hopkins University and author of Generic: The Unbranding of Modern Medicine, explained in a recent interview with US Pharmacopeia (USP): “There’s a mutual interest among manufacturers, whether they are brands or generics, for establishing and disseminating a public standard that helps us determine if a drug is what it says it is.” The various stakeholders – medicine, pharmacy, industry, and government – that keep our drug supply safe agree upon the standards, and USP publishes the methods that manufacturers and regulators can employ to demonstrate that medicines are what they should be. These standards apply to a drug’s molecular structure, and to the amount of active and inactive ingredients it contains to ensure a drug’s efficacy and safety.

USP strives for comprehensive standards, which is no small task. According to its latest annual report, more than 3,700 reference standards and more than 6,700 documentary standards have been issued. USP’s collaborative work with FDA to set drug quality standards for nearly 80 years has made FDA the gold standard worldwide for safety and quality.



All of the links along the supply chain have an obligation to be open and transparent about issues related to safety and quality. This is how the system secures the accountability necessary to earn and retain the trust of the medical profession and, ultimately, the patients. CEOs of our member companies tell me that they let it be known that all their manufacturing facilities, all over the world, are ready for inspection 365 days a year. While it is not realistic to expect every facility to be constantly monitored, we do have interlocking procedures that lead to overall integrity.

The FDA has a robust program for inspecting pharmaceutical manufacturing facilities worldwide. With a well-trained staff of nearly 1,300, its Office of Pharmaceutical Quality (OPQ) conducts assessments, inspections, research and surveillance of pharmaceutical manufacturing facilities. Reports from the public and the industry of potentially defective drug products help the FDA identify sites for inspection or investigation. Most companies that are inspected are found to be fully compliant with the regulations. In addition, Post-marketing Surveillance Programs are in place to identify adverse events, such as adverse reactions, that did not appear during the drug approval process.

Generic manufacturers not only readily comply with inspections audits; they also fund this oversight through the Generic Drug User Fee Amendments (GDUFA), which support FDA staffing and best practices in protecting public health and accelerating innovation. These fees (totalling nearly USD 500 million annually) support timely review of generic drug applications. Foreign as well as domestic companies identify and register all facilities involved in the manufacturing of generics and their active ingredients. The Biosimilar User Fee Act (BsUFA) operates on similar principles.

Critics may point to product recalls to draw attention to issues in the supply chain, but I believe the rarity of these events demonstrates the system’s effectiveness. When an issue is discovered, the proper mechanisms are activated. In the unlikely event that flawed medication does reach a patient, we should take comfort that all medicines can be traced to the manufacturer. The manufacturer of the product immediately notifies stakeholders in the supply chain, and then pharmacists or physicians reach out to notify patients and to determine alternative prescription options. Obviously, these recalls are widely publicized; transparency contributes to quality.



The pharmaceutical industry is ever changing through scientific innovations, which leads to new treatment therapies and options. Likewise, the regulatory system in the US continues to change and evolve to keep pace with scientific innovations.

Gene therapy, personalized/precision medicines and biologics are just a few of the most revolutionary developments that regulators are addressing. Last month, the FDA announced new rules for artificial intelligence in medicine. Outgoing Commissioner Scott Gottlieb announced, “A new approach to these technologies would address the need for the algorithms to learn and adapt when used in the real world.”

Similarly, the FDA is constantly adapting to manufacturing innovations. Its Current Good Manufacturing Practice (cGMP) regulations address methods, facilities and controls used in manufacturing, processing and packaging. The globalization of the supply chain, which is a fact of life for both brand and generic drugs, is often mentioned as a matter of concern, but in fact, the record bolsters confidence in the system. While it is true that so-called fake drugs circulate in developing nations through mail-order and online pharmacies, for example, US regulations, guidance and legislation are in place to minimize the possibility that they could reach our patients.

All of these factors add up to a system that ensures patients can take their medications with confidence. Michael Kopcha, director of the OPQ in the FDA’s Center for Drug Evaluation and Research (CDER), may have put it best when he said, “The quality of our drug supply is better than ever before. There is no difference in the quality of drugs based only on where they are made.”

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