UPDATE 2-U.S. FDA clears more generic drugs

(Adds user fee details, prescription growth)

By Kim Dixon

WASHINGTON, Oct 4 (Reuters) - The U.S. Food and Drug Administration on Thursday said it approved one-third more generic drugs last fiscal year and said it planned to speed review of these cheaper versions of brand-name drugs.

Officials said the push includes an expedited review process using an updated electronic format and team reviews of multiple applications for the same product.

The FDA said it approved a record 682 generic drugs in fiscal-year 2007 ended last week and faces a backlog of 1,300 applications, up from about 800 about a year ago.

"These applications represent a vast scope of products -- and over half are still protected by patents. There is no way we could approve all of these applications," Gary Buehler, FDA director for generic drugs, told reporters on a conference call.

"We had no anticipation that the number of generic applications would skyrocket as it did" in the past several years, he added.

Generic prescription sales rose 22 percent from 2005 to 2006, according to the nonprofit Kaiser Family Foundation, as blockbuster drugs lost patent protection and health-care payers sought to cut costs.

The average brand name drug prescription price was more than three times the average generic drug price in 2006, Kaiser says.

The Generic Pharmaceutical Association, which represents most of the industry, called the generic review effort weak.

The group wants limits on the practice of brand-name drugmakers petitioning the agency to stop generic applications, which holds up approval times substantially. The group also called for more resources -- not part of the FDA's plans.

"Another initiative in name only simply will not get the job done," Kathleen Jaeger, president of the group, said.

"For years, the agency has tinkered around the edges with programs and initiatives designed to increase efficiency but have proven to yield little in the way of significant results."

The agency said it might get more resources under a request now before the U.S. Congress, but its plans are based on its current funds and staff.

The agency said it received 880 generic applications in fiscal year 2007, compared with 792 applications in fiscal year 2006.

Unlike their brand name counterparts, generic drug companies do not pay user fees to help fund review of applications. The generic drug industry has opposed user fees in the past, but recently said it is open to discussions, according to its trade group.

Top generic drugmakers include Teva Pharmaceutical Industries Ltd (TEVA.O), Barr Pharmaceuticals Inc BRL.N, Mylan Laboratories Inc MYL.N, Watson Pharmaceuticals Inc (WPI.N) and Novartis AG's (NOVN.VX)(NVS.N) Sandoz unit. (Reporting by Kim Dixon)