For Immediate Release - September 14, 2000
MCCAIN, SCHUMER UNVEIL NEW GENERIC DRUG LEGISLATION
Bill Will Encourage Competition in the Pharmaceutical
Marketplace By Leveling Playing Field for Generic Drug Makers
Senators Predict Billions in Savings for
Consumers Senators Charles E. Schumer (D-NY) and John McCain (R-AZ) today stood with
leaders from the insurance industry and consumer groups to introduce
comprehensive bipartisan legislation to help bring lower-cost prescription drugs
to the marketplace. The Greater Access to Affordable Pharmaceuticals Act (GAAP)
will allow generic drug companies to compete with brand name manufacturers by
clearing the major obstacles that delay generic drug approval.
"The 1984 Hatch-Waxman Act was a critical consumer law because it
allowed generic drugs to get on the market, but over the years the lawyers have
picked the law clean," said Schumer. "Schumer-McCain restores the original
purpose of the law. It's not a freebie for generic drug makers – it simply
levels the playing field so they can offer consumers a choice at the counter."
"Affordable medicine is a serious economic problem for millions of
Americans but it is too often a financially devastating problem for millions of
seniors who do not have drug coverage through the Medicare system," said McCain.
"Our bill will help all Americans have access to lower priced prescription drugs
by creating a stronger and more competitive marketplace."
The 1984 Hatch-Waxman Act was designed to promote the growth of a
generic drug industry, but the full potential of the legislation was never
realized because of loopholes in the patent laws that allow brand-name drug
manufacturers to keep generic competitors out of the marketplace. These abuses
have resulted in monopolies for the brand-name manufacturers – and soaring
prescription drugs prices.
Under the Schumer-McCain legislation:
•
The number of patents that a generic drug company must address for FDA approval would be limited to two – the drug substance patent and the method of use patent. This will dramatically streamline the approval process for generic drugs because current law requires generic drug makers to address every relevant brand name patent in the FDA's registry. This list includes patents on formulation, dosage and non-essential features such as size, shape, the types of containers and tablet scoring.• If the first generic drug maker to file and challenge a brand name's patent reaches an agreement with the brand-name manufacturer to stay off the market, that company's 180-day market exclusivity would roll over to the next applicant. This roll-over would also apply if the first generic drug maker fails to go to market once their application is effective or loses in patent-challenge litigation.
• Only citizen petitions that present specific and substantial scientific evidence that the approval of a generic drug poses a significant threat to public health and safety would delay that drug's approval.
• The discrepancy between the FDA's regulations and statutes on bioequivalence testing methods will be eliminated. The current difference between the regulations and the law dissuades generic drug makers from challenging brand-name companies on drugs that require alternate forms of testing.
Schumer and McCain said that if generic drugs are able to come to market as soon as brand-name patents expire, consumers could save upwards of $71 billion on prescription drugs over the next 10 years. According to industry estimates, by the third year a generic alternative is on the market, consumers save, on average, 60% when they choose the generic over the name brand. For example, instead of purchasing a prescription of Prilosec, a widely-used ulcer medication, for $134.69, a consumer could get a generic alternative for only $52.53. Instead of buying a prescription of Zocor, a popular cholesterol medication, for $115.83, a consumer could buy a generic prescription for only $45.14.
"Over the years, there have been many prescriptions offered to make health care more affordable for working families. Most have broken down over partisan or ideological lines and we have not made much progress," said Schumer. "We are accomplishing these monumental savings not by redrawing ideological battle lines, but by restoring the intent of our patent laws."
The Schumer-McCain bill has been endorsed by the Health Insurance Association of America (HIAA), the Consumer Federation of America (CFA), Blue Cross/Blue Shield, the Academy of Managed Care Pharmacy, the Consumers Union, the National Consumer League and the Alliance of Community Health Plans.
HIAA President Chip Kahn and CFA Chairman and former Senator Howard Metzenbaum joined Schumer and McCain at the press conference to announce the legislation.
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