A Message from Kathleen Jaeger: Generics Help Seniors Avoid Medicare "Doughnut Hole"

Today, more than 23 million olderAmericans have transitioned into theMedicare prescription drug benefit program.Although most are pleased withtheir prescription drug coverage, thereare still an estimated 3 million senior citizenswho fall into the so-called "doughnuthole"—the period when manyMedicare beneficiaries switch from makingcopayments to paying for all of thecosts for their medicines.

Effective January 1, 2007, provisions inthe Medicare law will require the programto pay 75% of drug costs up to$2400 and 95% of drug costs over$6250—but beneficiaries will have tofoot the bill for all drug costs that fall inbetween.

Fortunately, generic medicines canprovide a parachute for those seniorswho are in danger of falling into thedoughnut hole. Generics allow seniors tocontinue to receive the same medicineswith the same results, but at a lower costthan with their brand name counterparts.Generics also can help to reducecopayments, since they actually costseniors—and all consumers—from 30%to as much as 80% less than brands.

Access to generics is important forseniors who are often on a fixed incomeand are watching health care costs ingeneral, and drug costs in particular, takean increasingly bigger bite out of theirwallets. In one recent survey, 26% of seniorcitizens surveyed stated that they didnot fill a prescription, skipped doses, ortook smaller doses of medications due tothe high cost of drugs.

Last winter, Mark McClellan, MD, PhD,then Centers for Medicare & MedicaidServices administrator, stated that genericmedicines are a key part of loweringMedicare prescription drug benefit costs.The AARP is also urging its members touse generic medicines to help delayfalling into the coverage gap. Not only willgenerics assist seniors in leading healthierlives, they also will lower overall costsfor the entire Medicare program, allowingscarce health care dollars to bestretched even further.

Yet, there is still more that can be doneto help lower prescription drug costs, notonly for Medicare recipients, but for theentire health care system. That is whythe Generic Pharmaceutical Association(GPhA) is actively encouraging Congressto remove barriers that block seniors—and all Americans—from receiving timelyaccess to generics.

Specifically, GPhA is asking Congressto address the following issues:

•Mandate that the FDA create aclear and efficient abbreviatedapproval process for generic biopharmaceuticals.There are everydaymedicines that do not haveaffordable generic alternativesbecause the FDA has not establisheda review process. The result:countless Americans are deniedaccess to these lifesaving medicinesbecause, without a genericalternative, their costs are simplyout of reach. Congressman HenryWaxman (D, Calif) and SenatorsChuck Schumer (D, NY) and HillaryRodham Clinton (D, NY) have introducedlegislation to create a pathwayto bring affordable generic biopharmaceuticalsto consumers.

•Restore the value of the 180-dayexclusivity period, which is beingthreatened by so-called authorizedgenerics and by attacks on the abilityof generic companies to settlepatent challenges. Brand companiesare increasingly using tacticsto undermine the 180-day exclusivityperiod, which Congress establishedas an incentive to bring morecompetition into the marketplace.Less competition means higherprices for consumers.

•Increase funding for the FDA'sOffice of Generic Drugs to bringaffordable generic medicines toconsumers faster

•Pass the "Lower Priced Drugs Act,"introduced by Senators DebbieStabenow (D, Mich) and Trent Lott(R, Miss), which helps prevent thefiling of frivolous citizen petitionsthat can needlessly delay genericmedicines from coming to market

Generic medicines can help keep seniorcitizens from falling into the doughnuthole, and they can help millions of otherAmericans control their health carecosts. To ensure that the benefits ofgenerics are shared by all, Congressneeds to address the obstacles currentlyfacing the generic industry in bringingthese life-improving and lifesaving medicinesto consumers.