Because most small-molecule drugs can be manufactured with easily replicable chemical processes that lead to a largely reproducible drug formulation, the clinical trial data that supported approval of the original version can be relied upon for the generic versions.
Technical tinkering, such as changing the formulation of a drug from a fast-acting pill to a slow-release system, is a common tactic.
Had this been a private-sector enterprise, competition and the threat of liability would have spurred innovation in the form of frequent updating of the drug's purification and formulation with state-of-the art technologies and would have required rigorous adherence to government regulations.
Astra claims to have a unique three-layer formulation that protects the drug from being degraded by stomach acid.
The company struggled to IPO but got public in late 2010 with a major valuation haircut (fraction of cash invested) as the only way to feed a very high burn rate supporting its formulation improvement for a generic migraine drug.
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As opposed to commodity generics--which are clones of the original drug--supergenerics differ from the original product in formulation or method of delivery.
Among Schering's pipeline drugs are a new formulation of Taxol, for breast cancer, and a drug co-developed with Novartis that was hoped to be a pill version of Genentech 's (nyse: DNA - news - people ) Avastin.
Astra notes that its formulation patents were filed in 1987, two years before the drug came on the market.
As a result drug researchers have to sift through millions of compounds in order to find the right formulation for a specific target.
During the first 180 days a generic drug is on the market, the generic company has a virtual market monopoly for its formulation.
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