Generics Must Compete On Price, Not Safety

“Competition should always drive costs down—never quality,” writes Pipes.

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America’s generic drug market is one of our greatest health policy successes. Today, 91% of all prescriptions in the U.S. are filled with generics. That dominance saves patients and taxpayers hundreds of billions of dollars every year—and it also drives innovation. Drugmakers know their monopoly on a new treatment will be temporary—typically only enjoying about 12-14 years of effective market exclusivity—which pushes them to keep inventing rather than coasting on old pharmaceuticals.

This success rests on a simple but powerful principle: generics can compete on price, but never by sacrificing quality or safety. Patients and doctors trust generics because they are required to be clinically equivalent to their branded counterparts—matching on active ingredient, dosage, route of administration, therapeutic effect, and safety. The Hatch-Waxman Act of 1984 enshrined that principle, striking a balance that has made the U.S. generic market the strongest in the world—and the most affordable.

Now, the FDA is putting that trust at risk.

The FDA has issued new draft rules on aluminum contamination in certain injectable drug products. These medicines are building blocks of intravenous nutrition given to premature babies who can’t yet feed normally. For these fragile newborns, too much aluminum is not a minor issue—it can stunt bone growth and impair brain development.

For decades, the FDA insisted that aluminum exposure be kept to an absolute minimum. But the new guidance relaxes those limits. It effectively carves out generous allowances for each ingredient, even if the combined total pushes right up against the danger zone. The guidance also allows so-called “skinny labels”—narrow instructions that assume hospitals will use the products only as written. But the FDA knows it has little control over how drugs are actually used in real-world hospital settings. The result is that some manufacturers will now be able to sell products with far more aluminum than the safest versions already on the market.

That’s a problem for two reasons.

First, premature infants often need more than a handful of these nutritional components. When mixed together, the FDA’s math simply doesn’t add up—total exposure can easily overshoot the safety threshold. And worse, neither doctors nor parents will know exactly how much aluminum a premature baby is receiving from these products—information that is critical to making safe treatment decisions.

Second, it punishes the companies that invested in cleaner, safer production methods. One brand-name manufacturer has shown it can reduce aluminum by nearly 98%. Instead of rewarding that innovation, the FDA’s new approach tilts the field toward corner-cutters.

The agency justifies this as a way to prevent shortages. But that’s a red herring. The agency’s own reporting has shown that the real causes of shortages are thin profit margins and poor manufacturing practices. Lowering safety standards won’t fix those problems—but it will drive responsible producers out of the market and put vulnerable infants at risk.

The stakes go beyond premature babies. If the FDA is willing to water down protections here, what’s to stop it from doing the same elsewhere? The genius of Hatch-Waxman was its bright line: generics had to match the original drug in safety and effectiveness. The moment regulators blur that line, public trust in the entire system begins to unravel. Doctors hesitate to prescribe, patients resist switching, and costs rise for everyone.

The more than 7,000 American babies born prematurely each week deserve uncompromising protection. Instead, the FDA’s draft guidance sends the opposite message: that standards can be bent, and safety is negotiable.

Competition should always drive costs down—never quality. The FDA should withdraw this misguided guidance before it harms vulnerable infants and undermines the trust that makes our generic system work.