02-17-2001

HEALTH: Brand-X Drugs Fight for Recognition

With fresh leadership and a newfound unity, the manufacturers of generic
versions of brand-name prescription drugs are preparing an aggressive
offensive on Capitol Hill this year. The industry, which recently merged
its three trade associations into one-the Generic Pharmaceutical
Association-plans to assert the benefits of its lower-priced medicines
during upcoming debate on whether government should add a prescription
drug benefit to Medicare.


But the association also plans to be active during discussions on the
reauthorization of a three-year-old law that gives brand-name drug
companies six months of additional "exclusive marketing time"
for their products-with no generic competition-provided that they conduct
more research into the safety and efficacy of prescription drugs for
children. The generic drug industry wants to push a few issues of its own,
such as clarifying the key drug patent laws that grant brand-name
companies exclusive marketing rights for certain lengths of time before
they face competition from the generics.


Many of these issues have been debated before. So what is different about
the industry's game plan now? Its newly unified association is not only
expected to be more effective in the lobbying wars, but it will have an
experienced Capitol Hill aide with solid Republican credentials as its
leader. "We're going to go and speak with an authoritative voice,
rather than leave any doubt about which one speaks for the industry,"
said William H. Nixon, the new GPhA president, who served as an aide to
former Senate Finance Committee Chairman William V. Roth Jr.,
R-Del.


Nixon said that this year could be critical for the generic drug industry.
"We're in a defining moment in history," he said. "The
public is clamoring for some sort of break" from the high costs of
drugs.


Based on recent studies by the Congressional Budget Office and others, the
generic drug industry estimates that consumers saved about $1 billion last
year by buying generic drugs in place of brand-name drugs. It projects the
savings to reach $5 billion over five years-not an insignificant amount if
the government decides to subsidize prescription drugs for the growing
senior citizen population. The industry should have some support from
lawmakers, too. "I'd like to see a mandate in there for the use of
generics," said Rep. Frank E. Pallone, D-N.J., who serves on the
House Energy and Commerce Health Subcommittee. The subcommittee has
jurisdiction over prescription drug issues, and Pallone is a strong ally
of the generic drug industry, even though his district is home to
pharmaceutical giants Bristol-Myers Squibb and Johnson &
Johnson.


Nixon and various health policy experts have noted that the generic
industry has had difficulty in the past selling the idea that its drugs
are equivalent to brand-name ones and can save consumers and the
government billions of dollars. Gordon Johnston, who was deputy director
of the Food and Drug Administration's Office of Generic Drugs from 1994-98
and who is now with Lachman Consultant Services, said the government
should have done more following the 1984 passage of the major drug patent
law to explain to the public that generic drugs are equivalent to the
brand names.


But, Johnston added, the generic drug companies themselves have sent
"mixed messages." Specifically, some have been caught doing what
they have long accused the brand names of doing-fixing prices. Mylan
Pharmaceuticals, the world's second-largest generic drug manufacturer,
agreed recently to pay individuals and state governments $100 million in
restitution as part of a settlement in a price-fixing case involving two
drugs for Alzheimer's patients.


The 1984 drug patent law, which was named for its sponsors-Senate
Judiciary Committee Chairman Orrin G. Hatch, R-Utah, and Rep. Henry A.
Waxman, D-Calif.-established the rules for competition between the
brand-name companies and the generics. But generic drug firms contend that
the brand-name companies, in an effort to get one or two more years of
exclusive marketing time, have since "gamed the system" by going
to court or by slipping riders into appropriations bills. These marketing
extensions are on top of the 17 or more years of exclusive marketing time
the companies are already entitled to before they face competition from
the generics. Two major goals of the generic drug industry are to clearly
define exclusive marketing time and to address the types of drug patents
that would be subject to these rules.


Also, Senate Commerce, Science, and Transportation Chairman John McCain,
R-Ariz., and Sen. Charles E. Schumer, D-N.Y., plan to reintroduce in March
a bill that they say would speed up government approval of generic drugs
and limit the kind of legal maneuvers that the generics accuse the big
pharmaceutical manufacturers of using to extend their patents almost
indefinitely.


Meanwhile, the brand-name firms are planning their defense. Jeff Trewhitt,
a spokesman for the Pharmaceutical Research and Manufacturers of America,
which represents brand-name firms, said that the industry is formulating
strategy on Medicare reform and is watching the Schumer-McCain bill
closely. "We see it as a one-sided bill," Trewhitt said, adding
that PhRMA may suggest amendments that could make it more acceptable to
the brand-name industry.


Nixon said that no one disputes the role of the brand-name pharmaceutical
companies in developing new medicines to conquer disease. "We don't
perceive PhRMA as being the enemy," Nixon said. But the generics
industry is hoping that the backlash arising from the high costs of drugs
will provide it with the edge in this year's debate.


April Fulton is a reporter for National Journal's CongressDaily.


April Fulton

National Journal