NAPM President Addresses the NAPM Mid Year Conference

Welcome to the National Association of Pharmaceutical Manufacturers Mid-Year Meeting and Educational Conference. I am Bob Milanese, President of NAPM. Tom Russillo, Chairman of NAPM, had a conflict this afternoon, so he apologized for not opening this meeting. It is exciting to have you here. This meeting is so important in keeping you abreast of the latest developments in the regulatory, scientific, and legislative arenas. We have a great lineup of speakers and presentations this afternoon and tomorrow. I would also like to thank all of our speakers and guests from FDA. It is so vital that the generic drug industry and FDA maintain an open and active give-and-take, and this meeting fosters this dialog.

Over the last several months, pharmaceuticals have been a major topic of discussion in national policy forums. This is largely due to the fact that drugs are playing an ever increasing role in health care. Pharmaceuticals, including our generic products, have the ability not only to get patients healthy, but to keep them healthy. Pharmaceuticals work to keep patients out of the hospital, to help asthma sufferers enjoy the outdoors, and to help fight cancer. Scientists are mapping out the code to human DNA, a discovery that will inevitably lead to medicines that are even more precise and more personal. The possibilities are truly endless.

Because of the evolving role that pharmaceuticals play in the everyday lives of both the sick and the healthy, the affordability of drugs continues to be a growing concern. The media loves the stories this debate provides -- stories of U.S. chartered buses heading across the Canadian or Mexican boarder so that the elderly and others on fixed incomes can buy their prescription medicines at savings of up to 60%; or stories of the poor having to choose between food, housing, and pharmaceuticals. Every candidate for the upcoming elections wants to craft the solution for ensuring access to our life-saving and life-enhancing drugs. In many states, such as Washington and Montana, the cost of prescription drugs has become a defining issue. Vice President and Presidential Candidate Al Gore released a proposal in late 1999 that would target brand name drug companies attempts to extend patents and to block competition through the citizen petition process. The issue of affordable drugs has especially been the focal point in the debate regarding a prescription drug benefit for the Medicare program. In fact, recent news reports indicate that the President and Democrats have chosen this as the one issue for which a legislative solution must pass and be signed into law before the election. The Democrats this week introduced their own prescription drug benefit bill, while House Republicans released their proposal last month. It is our industry that will bring a happy ending to people on both sides of this debate, because it is the thriving generic drug industry in the United States that enables seniors, the poor, and all consumers to have access to more affordable prescription medicines.

NAPM has begun a comprehensive communications campaign to work with doctors, pharmacists, patient groups, Congress, and the media to spread the word that generic drugs are safe and affordable equivalents to brand name drugs. In the past year, NAPM has concentrated on educating and disseminating information to Congress and to the media. One example is NAPM's discussions with Senator Tim Johnson of South Dakota, and his staff, on generic drug issues that culminated with Senator Johnson's participation at our annual meeting earlier this year. Senator Johnson has recently introduced an important piece of legislation that would provide consumers with greater access to generic drugs, which I will discuss shortly. Another example is NAPM's support of the congressional Generic Drug Equity Caucus, or GDEC. GDEC has been providing a forum for congressional members and their staff to learn more about generic drugs and strategize about ways to promote the use of generic drugs through legislative means. GDEC is sponsoring a Generic Drug Day on Capitol Hill that will serve to educate the media and Hill staffers. NAPM is also working more effectively with consumer groups and the media to get out the word about the benefits of using generic drugs. Not insignificantly, NAPM has established a Political Action Committee to help our industry support those Members of Congress who recognize the value of generic pharmaceuticals to consumers and the U.S. healthcare system.

Through NAPM's public affairs activities, consumers are learning that generics not only reduce an individuals cost but also help contain overall health care costs. I hope that those from FDA in the audience will help ensure that consumers are 100% aware that FDA's approval is the gold standard, and that the use of a generic drug is not only appropriate, but represents the use of absolutely safe, effective, and economically priced medications. All of our efforts will work to educate consumers and let them know that in making the choice to use generic drugs they are positively influencing the ballooning costs of health care in a way that does not adversely affect their health or the health of their loved ones. NAPM, along with several of our members, co-sponsored the production of a televised documentary entitled Generic Drugs - An Affordable Alternative which aired nationally on April 27 over the Fox Health Network. This is a terrific educational film stressing the safety, quality, effectiveness, equivalence, and affordability of generic drugs. Featured in the program were Sen. Tim Johnson (D-SD), Gary Buehler, OGD, Roger Williams, USP, Steve Schondelmeyer, Prime Institute, Leon Shargel, and yours truly.

Y2000 ELECTIONS
As I noted earlier, pharmaceuticals are the hot political topic. I believe that much of this can be attributed to Schering-Plough and its push to extend its monopoly for Claritin. Each year that Schering has tried to push its special interest legislation in Congress, the press has paid more and more attention. Through multiple press stories and hard work by NAPM on Capitol Hill, Schering's attempts to extend its monopoly have been exposed for what they are -- an anti-consumer, anti-competition effort. The debate about Schering also helped foster the debate that led President Clinton to announce his proposal to reform Medicare and to create a Medicare prescription drug benefit a year ago. Congressional Republicans and Democrats then spent a good portion of 1999 arguing over how extensive a benefit program should, or should not, be -- and it seems that this debate is only just heating up. As I noted earlier, both Republicans and Democrats have read the polls and recognized that the cost of prescription drugs is a number one concern of voters. Both parties are working to seize the issue as their own. This is a great opportunity for generic drugs. In talks and meetings on the Hill, NAPM has been told that generic drugs will be an essential tool in making a Medicare benefit feasible. More and more often, members of Congress are not just assuming that generics will be available to consumers -- they are being proactive in promoting the use of safe and effective products. The most recent example of this was Senator Tim Johnson's introduction of S. 2501, the Generic Pharmaceutical Access and Choice for Consumers Act of 2000. NAPM wholeheartedly commends Senator Johnson for his strong leadership. S. 2501 would create a preference for using FDA-approved generic drugs within federal health care programs, unless the brand name drug is either ordered by the prescribing physician or requested by the patient. This concept might sound a little familiar to you, and it should. Senator Johnson's bill expands on the concept of a generic drug preference, which was the cornerstone of a bill introduced by Representative Carrie Meek last Congress. Representative Meek's bill would have created a generic drug preference for the Federal Employee Health Benefits Program. Senator Johnson's bill would create a generic drug preference for that program and all other prescription drug programs administered by the federal government, including programs administered by the Veterans Administration and the Indian Health Service. In addition, it would direct the Senate to consider, to the extent feasible, a preference for generic drugs as part of any legislation that adds a prescription drug benefit to the Medicare program. Finally, Senator Johnson's bill would preempt states from refusing to substitute an FDA-approved generic drug for the brand name drug. As you are well aware, the brand name drug industry continues to lobby state legislatures to pass unwarranted restrictions on generic substitution. S.2501 would put a stop to this practice that fattens the pocketbooks of the brand name industry at the consumers expense.

WAXMAN-HATCH
Of course, protecting the delicate balance of Waxman-Hatch remains an issue at the top of NAPM's agenda. NAPM continues to educate members of Congress about the benefits consumers and industry have seen in the 16 years since Waxman-Hatch was signed into law. New, life-saving therapies resulting from increased expenditures made by brand name companies have saved lives. Competition spurred by the generic drug industry has increased consumer access to prescription drugs. But the consumer is not the only beneficiary; brand name drug companies have seen their profits soar. Late last year, Senator Hatch has established a Hatch-Waxman Task Force to explore how the consumer and industry have faired under Waxman-Hatch. Last December, Senator Hatch met with members of the brand name and generic industries, and, in February, the Senator met with consumers.

Although Waxman-Hatch reforms are unlikely to be the subject of hearings, much less legislation this year, NAPM recognizes that this issue is not going away. For that reason, we are continuing our educational efforts about the benefits of this important law.

RESOURCES
As you all are well aware, the amount of resources available to FDA directly impacts FDA's ability to ensure that safe and effective generic drugs are available in a timely manner. NAPM has relentlessly advocated and lobbied for OGD funding. I am pleased to announce that this year will likely be the fourth year in a row that the generic drug industry has successfully lobbied for an increase in funding for OGD. At a minimum, OGD should receive a $1.2 million increase for fiscal year 2001, which should provide OGD with the resources it needs to upgrade its computer systems so that we can electronically file generic drug applications with FDA. Despite NAPM's success in securing additional funding, the increases merely scratch the surface of additional resources that OGD needs to do its job effectively. For that reason, NAPM continues to advocate user fees for generic drug reviews. User fees that are a supplement to OGD's appropriated funds would help FDA meet its statutory time frames for review and approval of generic drug applications.

STATE ACTIVITIES AND MEDICAL GRASSROOTS
NAPM is also fighting efforts that undermine consumer access to generic drugs at the state level. In Connecticut, NAPM testified and lobbied against legislation that would have restricted the ability of managed care organizations to take reasonable, corrective steps against physicians that only write scripts for brand name drugs. We were successful in our efforts to defeat this legislation which would have resulted in higher drug costs.

During the debate in Connecticut a very troubling issue arose. We learned that Connecticut physician groups took the out-moded and uninformed position that generic drugs are inferior to brand name drugs as the justification for those physicians who consistently wrote prescriptions for brand name products. While we were able to convince the Connecticut legislature that the physicians groups position was wrong as a matter of science and medicine, we believe there needs to be a physician education initiative on the regulatory approval process for generic drugs, their unquestioned safety and efficacy, and the important role generics play in the healthcare marketplace. I announce today that NAPM intends to schedule, over the next few months, a series of meetings with AMA, the American Academy of Pediatrics, and various national medical societies to discuss the issue of the therapeutic equivalency and cost savings of generic pharmaceuticals. This new initiative, we hope, will result in the medical community becoming an ally to our industry.

UNIFICATION
As most of you know, NAPM has been involved in discussions with the Generic Pharmaceutical Industry Association and the National Pharmaceutical Alliance to consolidate into a new trade association. As you also know, we have decided at NAPM to remain independent.

The generic pharmaceutical industry has many challenges ahead. As I discussed today, at every turn we face obstacles by PhRMA, which represents one of most well heeled industries in the United States. These obstacles and challenges can only be overcome by our industry working together. I commit to the new generic association that NAPM stands ready to cooperatively and aggressively work with it in representing the interests of the entire generic pharmaceutical industry before the U.S. Congress, state legislatures, and federal and state regulatory bodies.

CONCLUSION
This past year PhRMA ran advertisements claiming that the generic drug industry does not in any way, shape, or form contribute to this countrys research and development. This statement is dead wrong. The competition that generics bring to the marketplace spurs the drive to find new and better remedies. And if it were not for our competition, access to these new pharmaceuticals might be a luxury available only to the wealthy or fully insured. Access to pharmaceuticals through a competitive marketplace benefits all of us -- consumers, patients, brand name companies, and generic companies alike.

Thank you.

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NAPM is the frontline trade organization of the U.S. generic drug industry. Representing generic pharmaceutical manufacturers, distributors and their suppliers, NAPM's first priority is a total commitment to providing safe, effective, affordable drugs to U.S. consumers.

For more information about NAPM and generic drugs, contact Robert S. Milanese or Leon Shargel at NAPM, (631) 580-4252.

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