For Immediate Release Office of the
Press Secretary October 21, 2002
President Takes Action to Lower Prescription Drug Prices
By Improving Access to Generic Drugs
TODAYS PRESIDENTIAL ACTION
- President Bush announced a new rule to lower prescription drug
costs for millions of Americans by improving access to generic
drugs, which are safe and effective and can be much less costly
alternatives to brand-name prescription drugs. The proposed rule
is expected to lead to savings in drug costs of over $3 billion
per year for Americas consumers.
- This regulatory action will close loopholes in the
implementation of the Hatch-Waxman law, which governs how generic
drugs can compete with brand-name drugs. As a result, patients
will benefit from greater and more predictable access to safe,
effective, low-cost generic alternatives to brand-name drugs.
DETAILS OF FDAS PROPOSED RULE ON GENERIC DRUGS
The new FDA rule will:
- Implement Federal Trade Commission (FTC)
recommendations for improving access to generic drugs by
making significant changes in the use of automatic 30-month stays
and in the drug patent listing process.
- Allow one 30-month automatic stay at most in patent
infringement litigation involving a generic drug application:
Drug manufacturers would be limited to only one 30-month stay per
generic application, to resolve allegations that a generic drug
maker is infringing a drug patent. According to the FTC, this is
an appropriate time period for courts to resolve cases of patent
infringement. Multiple 30-month stays, which have led to delays in
generic entry of an additional 4 to 40 months, would not be
permitted.
- Tighten requirements and increase disclosures for drug
patent listings: Drug manufacturers would no longer be allowed
to list patents in the FDA Orange Book for drug packaging, drug
metabolites, and intermediate forms of a drug. Permitted listings
include patents on active ingredients, drug formulations, and uses
of a drug. In addition, a more detailed signed attestation
accompanying a patent submission will be required, and false
statements in the attestation can lead to criminal charges. This
will significantly reduce opportunities to list inappropriate
patents just to prevent fair competition from generic drugs.
- Provide billions of dollars in savings for public and
private health insurance programs: The rule will not only
provide savings for patients by giving them more safe and
effective, low-cost prescription drug alternatives; it will reduce
budgetary pressures on state Medicaid programs, and reduce the
cost burdens facing employer-provided coverage.
- Lower the cost of improving Medicare with prescription drug
coverage: The rule provides important relief for seniors, but
it is only a first step. Seniors really need an improved and
strengthened Medicare program like the President has proposed,
with better and more secure coverage options. While the House of
Representatives took an important first step this year by passing
legislation to provide drug coverage, the Senate failed to act.
The President is calling on the leadership of the Senate to put
politics aside and pass a prescription drug benefit for Medicare.
The proposed rule makes this job easier by reducing the cost of a
Medicare prescription drug benefit.
BACKGROUND ON TODAYS PRESIDENTIAL ACTION
Todays Presidential action improves the FDA regulations
implementing the Hatch-Waxman law. These regulations govern when
generic drugs can compete with brand-name drugs. As a result,
patients will benefit from greater and more predictable access to
effective, low-cost generic alternatives to brand-name drugs.
- Under the Hatch-Waxman law passed in 1984, generic competition
is allowed when a new drugs patent and market exclusivity
protection expires, or when a 30-month stay terminates. The intent
of the law is to provide incentives to develop valuable new drug
treatments through patent protection, but also to facilitate
access to generic versions of the drug after the innovators patent
expires.
-
FDA-approved generic drugs are safe and effective alternatives
to many brand-name prescription drugs, at a cost that is often
only one-third as great. Almost half of all prescriptions filled
today are for generic drugs, and generic alternatives exist for
many commonly-used brand name medications providing an equally
safe and effective but much less expensive alternative for
millions of Americans.
- In recent years, however, access to generic drugs has
sometimes been delayed by litigation. Under FDAs past
interpretations of the Hatch-Waxman law and the Orange Book patent
listing process, drug manufacturers have been able to file
additional patents on packaging, ingredient combinations, and
other minor matters in order to get repeated 30-month automatic
stays in court that significantly delay access to generic drugs.
- In response to bipartisan Congressional concern about this
issue, the FTC conducted a detailed study of Generic Drug Entry
Prior to Patent Expiration. The study was issued in July 2002. It
identified cases involving seven major brand-name drugs between
1994-2000 where the repeated use of automatic stays on late-filed
patents had delayed access to generic drugs. The FTC made the
following recommendations:
- Allow only one automatic stay per generic drug application;
and
- Tighten the Orange Book patent listing process to help ensure
that only appropriate patents are filed.
The proposed rule can be viewed at www.fda.gov/ohrms/dockets.
For more information on the Presidents initiatives please visit
www.whitehouse.gov
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