Biotech Values

[DewDiligence]

What is an "A/B Rated" product?

An “A/B” rating is the industry lingo for a US generic drug that is substitutable for the corresponding branded drug.

I have always thought a drug (in the US) was either generic and substitutable, or not. And a 505b2 is certainly not.

That’s correct—a drug approved under the 505b2 NDA pathway (e.g. NVS’ Omnitrope) is not substitutable for the corresponding branded drug and is not “A/B” rated. Such drugs are sometimes referred to as branded generics.

Is there some grey area?

A label carve-out for an indication that is still protected by a “use” patent or Hatch-Waxman exclusivity (as discussed earlier in this thread) is a grey area in the sense that enforcement of the carve-out (i.e. prevention of substitution for the carved out indication) is spotty at best. A second grey area is that a few states have their own restrictions on substitutability even when a drug is “A/B’ rated. Neither of these grey areas is likely to materially lessen the sales of a US generic drug and hence, from a practical standpoint, substitutability in the US is a yes-or-no proposition.