Mollohan, Calvert Work to Cut
Health Care Costs Through Generics

      WASHINGTON (September 22, 2000) -- Loopholes in federal prescription drug law are inflating the health-care tab paid by American consumers and taxpayers, according to two lawmakers who are leading the push for more affordable medicines.

      U.S. Reps. Alan Mollohan (D-W.Va.) and Ken Calvert (R-Calif.) this week introduced the Pharmaceutical Reform Act of 2000, which would update the 1984 law that governs competition in the prescription drug industry. Mollohan and Calvert say brand-name drugmakers have exploited loopholes in that law to keep lower-cost generics out of consumers' hands.

      "The case for generic drugs is a very compelling one," Mollohan said. "On average, they cost 70 percent less than brand drugs yet provide the same health benefits. Generics are one of those rare forces that actually help to drive down health-care costs."

      Calvert said that the potential savings are far greater than anything realized to date.

      "A recent report from Samford University found that for every one-percent increase in the use of generic drugs, American consumers and taxpayers realize more than $1 billion in annual savings. Generics are clearly a part of the solution to rising health costs -- if we can increase the public's access to them," he said.

      The Pharmaceutical Reform Act would modernize the 16-year-old Hatch-Waxman Act, which both Mollohan and Calvert credit for bringing structure and balance to the prescription drug marketplace. They noted, however, that brand drug companies have found ways to use the law to delay the introduction of generic competitors.

      Their legislation would restore fairness by:

• Eliminating the ability of brand companies to file "citizen petitions" to delay generic competitors. Petitions would be dismissed if they are found to be filed by a paid petitioner rather than a private citizen, as the original law intended;

• Ending the practice of brand drug companies delaying generics by claiming patent infringement based on new dosage requirements, tablet shape or type of container used. Patent claims would be limited to cover only the active ingredients used in a new drug;

• Taking away the ability of brand companies to receive an automatic 30-month stay against a generic drug by simply filing a patent infringement claim. Merits of the claim would have to be demonstrated before receiving a stay; and

• Prohibiting brand drug companies from paying generic manufacturers not to introduce drugs. Under current law, the first generic company to develop a drug receives 180 days of market exclusivity; if the product is not introduced, the clock never starts running. Some generic drug companies enter deals with brand companies in which the generics agree not to introduce drugs in order to avoid years of costly litigation.