High cost of FDA compliance for generics leads to higher prices
The complexity and cost of completing a generic-drug application has also grown enormously. In 2003, when I began working at the FDA, we estimated that it cost less than $1 million for a firm to file a generic-drug application. A drug would have to fetch about $10 million in annual revenue before it would be subject to generic competition. Today, filing a generic application requires an average of about $5 million and can cost as much as $15 million. This means that a drug may not face brisk generic competition until it exceeds $25 million in annual revenue. Thanks to these changes, infrequently used generics—such as clomipramine for major depression—may now have only one competitor and cost as much as branded drugs