Generic Industry Year in Review

Critical health care issues were frontand center in Congress during 2007 andwill likely drive the domestic debate inthe 2008 election year. Many of theseissues affect the generic pharmaceuticalindustry, pharmacists, and patientsacross the country.

Looking back at 2007, the genericindustry had a very productive year, fromthe introduction of groundbreaking biogenericslegislation to efforts to stop proposalsthat would have harmed patientaccess to safe and affordable genericmedicines.

The progress made on legislation tocreate an FDA approval pathway for biogenericswas extraordinary. More than70 diverse organizations representingconsumers, older Americans, businesses,and patients joined us in the fight to bringlifesaving biogenerics to those in need.And, in spite of intense pressure fromour opponents, legislation was approvedby a Senate committee within 5 months,which is remarkable progress for newlegislation.

Although much work still needs to bedone?particularly in ensuring that marketexclusivity provisions do not needlesslykeep biogenerics from patients?we were pleased by the commitmentfrom lawmakers to move biogenericslegislation forward in 2008. With momentumgrowing and patients needingaccess, real potential exists to pass legislationthat will give patients timelyaccess to biogeneric medicines.

2007 also saw the enactment of legislationto stop the long-standing practiceof brand companies using citizen petitionsto keep generics out of the hands ofpatients. As part of an FDA reform billsigned into law, brand companies willfind it more difficult to use citizen petitionsto block generic competition. TheFDA is now required to review petitionswithin a 6-month time period and considergeneric applications and petitionssimultaneously. This important new lawtook 1 tool out of the brand companyarsenal in delaying access to generics.

In addition, great progress wasachieved on the trade agreement front.Last spring, Congress and the Bushadministration unveiled the bipartisanNew Trade Policy for America which tooka major step forward in ensuring that ourtrade agreements recognize the criticalbalance between ensuring access tosafe and affordable medicines and fosteringpharmaceutical innovation. Thispast fall, Congress approved the U.S.-Peru Free Trade Agreement. This newagreement demonstrates that bringingcompetition into the pharmaceuticalmarketplace results in lower patientcosts without stifling innovation.

In fact, as generic competition hasgrown in the United States, so has investmentby brand companies in new drugdevelopment, with new blockbusterdrugs regularly coming to market.We arenow hearing the federal government sayingthat the free trade agreementsshould reflect the balance betweenaccess and innovation that the domesticmarket has achieved.

Additionally, as the backlog of genericdrug applications continues to grow, wesuccessfully worked to increase fundingfor the FDA?s Office of Generic Drugs. Wealso thwarted an attempt to increasethe Medicaid rebate for generic drugs,and convinced lawmakers not to includemajor windfalls for brand pharmaceuticalcompanies as part of an amendmentconcerning antibiotics and enantiomers.

Finally, we are spending considerabletime on the issue of pharmacy reimbursementand the calculation of the AverageManufacturer Price. While we submittedextensive comments to the Centers forMedicare & Medicaid Services, the finalrule published in July 2007 did notaddress many of our stated concerns. Weare working with a coalition that includesthe National Association of Chain DrugStores, the National Community PharmacistsAssociation, and many others topromote legislation that would revise therule so that it will not adversely affectpatients? access to generic medicines.

We have also been active in state legislaturesacross the country beating backattempts to pass carve-out legislation.Brand companies are trying to take stepsto block generic substitution on variousmental health and HIV/AIDS drugs, atsubstantial cost to states and patients.We were successful in 2007, but we arealready seeing signs that brand companieswill continue to promote carve-outsin 2008. We will be back to ensure thataccess is not jeopardized.

It is clear that 2008 will be anotherbusy year for the generic pharmaceuticalindustry, and we will be delivering themessage loud and clear that generics arethe right choice for better health.