Good and Bad News in Health Care Reform for Patients

Health care reform has both good and bad news for patients. Americans will receive health care coverage and seniors no longer have to worry about falling into the Medicare "doughnut hole," but affordable biogenerics will not be available for decades.

A Message from Kathleen Jaeger

A tough Washington, DC, winter has given way to spring just as the often acrimonious debate over health care reform has yielded to reflections on what was and was not accomplished. Now that health reform has been signed into law, we can look back at how Congress extended access to generic medicines on one hand, and on the other erected a significant road block with respect to biogenerics.

Responding to long-standing criticism that the Medicare Part D prescription drug benefit must be improved, Congress moved to close the coverage gap or “doughnut hole” in which many seniors found themselves before catastrophic coverage kicked in. Medicare beneficiaries who use Part D coverage will now enjoy a $250 rebate to cover part of the cost of the doughnut hole, plus a federal government subsidy to cover most of the cost of both generic and brand name drugs. By subsidizing generic medicines, Congress put into place a cost-containment measure that hopefully may offset the discounts on brand drugs that is likely to drive up brand drug spending. This is good news for many seniors who are struggling every day to pay their bills and refill their prescriptions.

Affordable Medicine

Congress also rejected language that would have changed the current generic patent resolution mechanism that now can quicken access to affordable medicines. During this year’s debate on health reform, independent entities put forward several convincing studies and analyses that showed banning patent settlements would deny patient access and reduce the number of patent challenges brought by generic companies, working contrary to the goal of creating incentives to bring lower-cost generic drugs to market sooner. Recent research has shown that settlements that successfully conclude patent litigation typically result in the early and predictable introduction of generics competition—resulting in savings for the consumer.

Congress endorsed a science-based approval pathway sought by the GPhA. Unfortunately, the provision provides excessive and unprecedented 12 years of market exclusivity to new biologic products and through an “evergreening” provision, and provides almost every next-generation product another 12 years of market exclusivity.

Congress’ failure to set a reasonable market exclusivity period is extremely problematic for patients and undermines the sustainability of the health care system. Why? Because the 12—12 market exclusivity paradigm skews investment away from the biogeneric sector toward brand biologics by assuring the brand industry’s continued monopoly on biologics for several decades. This adverse outcome occurred as a result of undue political influence from the brand drug industry. The chief stumbling block to ensuring consumers access to more affordable biogenerics is that the current federal law—the Hatch-Waxman Act, which allows for affordable generic versions of popular medicines—does not apply to biopharmaceuticals.

Biologics

The need for a workable biogeneric approval pathway is urgent. Currently, 160 biologics are approved and used in the treatment of life-threatening illnesses. Biologics are becoming increasingly popular and will account for half of the new drugs approved in 2012 by the FDA. Also in 2012, 12 of the current top 20 biologic products driving US sales of $18 billion in 2009 will be off-patent.

We are pleased that Congress agreed with GPhA that the science exists for the FDA to create a science-based approval process that allows the agency to approve biogenerics on a case-bycase basis. The need to create a market for biogenerics, however, demands that GPhA continues to urge Congress for a more reasonable market exclusivity period and limit brand companies from “evergreening” their products.

All in all, health care reform has both good and bad news for patients. While it is certainly welcome news that more Americans will be receiving health care coverage and seniors no longer have to worry about falling into the Medicare doughnut hole, it is deeply disappointing to the countless Americans struggling with the high price of brand biopharmaceuticals that more affordable biogenerics will not be available for decades. â–