Generics Yield Increased Savings for Patients

It has only been a couple of monthssince the generic pharmaceuticalindustry kicked off its yearlongcelebration of the 25th Anniversaryof the enactment of the Drug PriceCompetition and Patent Term RestorationAct of 1984 (Hatch-WaxmanAct), which created the modern USgeneric pharmaceutical industry.

In January, the Harris Poll publishedthe results of a survey thatfound that 81% of respondents indicatedthat they would choose a genericover a brand name drug. This compareswith just 68% in 2002. The pollalso found that 40% of respondentssaid they would “always choose to buygeneric drugs over brand name,” a 17%increase since 2006. Conversely, only4% of respondents said they “wouldalways choose to buy brand name prescriptiondrugs over generics.”

Also during January, the results ofthe “National Health Spending in 2007”report was published that demonstratedgrowth in US health care spendingin 2007 was at its slowest rate since1998. The 4.9% increase in retail prescriptiondrug spending, the slowestgrowth rate since 1963, was in partthe result of “a further increase in thegeneric dispensing rate.” In addition,the report found that prescription drugprices grew at only 1.4% in 2007, “drivenin part by increased use of genericsand the introduction of generic drugdiscount programs by large retail chainstores.”

As America ended 2008, genericswere being dispensed for approximately69% of all prescriptions butaccounted for only 16 cents of everydollar spent on prescription medicines.For 25 years, generic medicineshave been saving patients andthe government billions of dollars ayear.

2009—The Year of Biogenerics?

With the contribution of generic pharmaceuticalsto affordable health careso evident, it is possible that the 25thAnniversary of Hatch-Waxman couldsee the floodgates open to even moresignificant patient savings, namelythrough the approval of a sciencebasedpathway for biogenerics.

During the GPhA Annual Meeting,held in February, Rep Henry Waxman(D, CA) noted in a special message toour industry that, “Biologics are one ofthe fastest growing and most expensivecategories of drugs, frequently costingtens of thousands, even hundreds ofthousands of dollars per year. Thesedrugs are often life-saving but whenwe originally enacted our law 25 plusyears ago, biologics were essentiallynonexistent, so we didn’t explicitlycover them under the law. A workablescientific regulatory and legal pathwayfor biogenerics will ensure moreaffordable medications for Americans,and we believe it will spur the innovationin the biotech markets. I intend touse my position as chairman (of theEnergy and Commerce Committee) toimprove the health and well-being ofthis nation. I know that a critical pieceof achieving that goal is to bring genericcompetition to the biotech drugmarket. The ballooning costs of thesedrugs are unsustainable, and I want towork with the president, my committee,all my colleagues in Congress, andthe full array of stakeholders to getthis job done.”

On March 11, Rep Waxman madegood on that promise, introducingHR 1427, the Bipartisan BiogenericsConsensus Bill: “Promoting Innovationand Access to Life-Saving MedicineAct,” with Reps Nathan Deal (R, GA),Frank Pallone (D, NJ), and Jo AnnEmerson (R, MO). This bipartisan,consensus bill achieves the balance offostering pharmaceutical innovationwhile also making affordable medicinesavailable to patients.

Consumer, business, and labor organizations,and many of our nation’sgovernors support legislation thatbrings biogeneric medicines to patientssooner rather than later. Over the past2 years, members of Congress havelearned a great deal about biogenericsand heard from the FDA that the scienceexists to approve safe, effective,and affordable biogenerics. They haveheard that the FDA scientists want theauthority and flexibility to determinehow to best ensure safety and efficacy.In addition, they have heard that significantcost savings will result frombringing biogenerics to patients.

Studies continue to show that creatinga workable biogenerics approvalpathway will not only bring life-savingmedicines to patients in need, it alsowill save our health care system billionsof dollars.

Hatch-Waxman has clearly demonstratedthat we can achieve the muchneeded balance between pharmaceuticalcompetition and innovation forthe benefit of patients, payers, andstate and federal governments. Wehave done it before with generics, andwe can do it again with biogenerics.Although there will be much debateas legislation moves forward, we arehopeful that biogeneric legislation willprovide the capstone to our celebrationof 25 years of more affordablemedicines for consumers.