AMNews: Nov. 11, 2002. Bush plan aims to speed access to generic drugs ... American Medical News

Bush plan aims to speed access to generic drugs

Proposal would limit the ability of brand-name drugmakers to fend off generic competition.

By Markian Hawryluk, AMNews staff. Nov. 11, 2002. Additional information

Washington -- Medicare beneficiaries might not get a prescription drug benefit this year, but the Bush administration is seeking to reduce the amount those beneficiaries must pay for drugs by boosting access to generic medications.

In October, the White House proposed a rule that would implement Federal Trade Commission recommendations for improving generic-drug availability.

An FTC report earlier this year detailed seven cases in which major brand-name drug manufacturers extended their periods of market exclusivity by filing additional patents on their medications.

Under the Hatch-Waxman Act of 1984, brand-name manufacturers must list their patents on each drug. Generic makers must certify equivalency for every patent that is listed or assert that a patent does not apply to their drug.

If the original manufacturer sues to challenge those assertions, it triggers a 30-month protection against generic competition. With carefully timed filings of additional patents, a brand-name drug manufacturer can extend a medication's patent life almost indefinitely, critics say.

The administration's measure would allow only one 30-day automatic stay for patent infringement litigation involving a generic drug application. It also would limit the types of patents that manufacturers could use to protect their brand-name drugs.

The measure would allow only one 30-day automatic stay for patent infringement.

"Our message to brand-name manufacturers is clear," the president said. "You deserve the fair rewards of your research and development. You do not have the right to keep generic drugs off the market for frivolous reasons."

The fiscal implications of the measure are substantial for consumers, employers, and public and private health programs, as well as for generic and brand-name drugmakers. Over the next three years, 200 drug patents are set to expire, and 27 blockbuster medications are due to come off patent in the next five years.

"The most alarming aspect of these abuses is that they involve almost exclusively the most popular, and sometimes the most needed, drug products," said Kathleen Jaeger, the president and CEO of the Generic Pharmaceutical Assn. "Specifically, we are seeing the most abuse with those drug products with annual sales over $500 million."

Opponents counter that the Hatch-Waxman Act has been extremely successful in improving access to generics. The generic industry's share of the prescription drug market has increased from 20% before implementation to almost 50% today.

"The marketplace shift demonstrates that the system is working as intended by Congress by maintaining incentives both for research on new drugs and for generic copies of older drugs," said Gregory Glover, MD, who testified on behalf of the Pharmaceutical Research and Manufacturers of America at an October congressional hearing.

While the president's proposal lent credence to the notion that brand-name drugmakers had violated the intent of Hatch-Waxman, consumer groups said the measure did not go as far as legislation passed overwhelmingly by the Senate in July.

The bill, sponsored by Sens. Charles Schumer (D, N.Y.) and John McCain (R, Ariz.), would allow generic drug manufacturers to sue to challenge the patents listed by name-brand drugmakers. It also would seek to prevent the original manufacturer from paying its generic counterparts not to market a competing drug.

"The proposed regulations seem intended to undermine the strong legislative measure that now enjoys very significant, bipartisan and growing support," said Ron Pollack of the consumer group Families USA. "Much bolder action is needed than what the administration announced."

Generics could save billions

The Congressional Budget Office estimated that the bill would save $6 billion in annual drug costs. The administration said its proposal would save $3.3 billion per year. The House has not yet considered drug-patent legislation this session.

"This weak proposal is days late and billions of dollars short," said Frank Clemente, director of Public Citizen's Congress Watch. "This election-eve ploy is designed to get votes, not give consumers the prescription drug price relief they deserve."

200 drug patents are set to expire in the next 3 years.

Congress also has been unable to agree on a Medicare prescription drug benefit. The House passed a $30 billion package that included both a drug benefit and Medicare payment provisions. The Senate so far has failed to pass a drug benefit and Medicare reimbursement-fix legislation.

The battle for public support on the prescription drug issue has at times been intense. AARP released results of a poll that found 84% of those surveyed believe greater access to generic drugs is an important part of the solution to controlling rising drug costs.

"We are urging our members and all Americans to ask their doctors about lower-cost generic drugs and other alternatives," said AARP CEO William Novelli.

PhRMA, meanwhile, organized a group of celebrities, including talk show hosts Montel Williams and Leeza Gibbons, to urge Congress not to modify the patent-protection laws. The group's message is that proposed changes would hinder pharmaceutical advancements.

"There were no medicines for Alzheimer's 10 years ago," said Russel Bantham, PhRMA's executive vice president, whose mother has Alzheimer's disease. "There are four today, and pharmaceutical companies now have 17 new medicines in development for the disease."

PhRMA also released the results of a study by Columbia University economist Frank Lichtenberg, which found that replacing older medicines with newer ones reduced non-drug health expenditures more than seven times as much as it increased drug spending, mainly by cutting the spending for hospital and physician office visits.

Surveys have found most doctors believe generics to be equivalent to brand-name drugs. But prescribing patterns show another story.

One survey, published in 2001 in the Journal of the American Pharmaceutical Assn., found that 52% of physicians chose to allow pharmacists to substitute generic drugs rather than write a prescription for the generic themselves. Practices vary by specialty. Cardiologists, for example, allowed substitution only 29% of the time.

"My primary concern today is the affordability of prescription drugs and prescription drug benefits," said Sharon Levine, MD, who serves as associate executive director of the Permanente Medical Group for the Kaiser Permanente Medical Care Program. "The only real difference between generic drugs and their brand-name counterparts is the price."

ADDITIONAL INFORMATION:

Generics generation

In a survey of more than 1,000 people age 45 and older:

90% said they would accept generic versions of drugs in order to reduce out-of-pocket costs.
84% believe greater access to generic drugs is an important way to control rising drug costs.
70% said that drug companies exert too much power over Congress.
66% said they usually choose generics over brand-name drugs when given a choice.
66% said they favor legislation to close the loopholes used to keep generic drugs off the market.
24% said they have not been able to afford a prescription medication when there was no generic available.

Source: AARP, RxHealthValue and the Coalition for a Competitive Pharmaceutical Market

Weblink

White House proposal to improve access to generic drugs (http://www.whitehouse.gov/news/releases/2002/10/20021021-4.html)

Hearing, "Examining Issues Related to Competition in the Pharmaceutical Marketplace: A Review of the FTC Report, 'Generic Drug Entry Prior to Patent Expiration,' " House Energy and Commerce Committee's health subcommittee, Oct. 9 (http://energycommerce.house.gov/107/hearings/10092002Hearing745/hearing.htm)

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