A new study bankrolled by the Pharmaceutical Research and Manufacturers of America (PhRMA) claims that "authorized generics" can lower US health care costs by hundreds of millions of dollars? a contention that was quickly disputed by generic drug industry leaders. The PhRMA study, which was conducted for the association by IMS Health, focused on the practice by some brand name pharmaceutical manufacturers of licensing a selected generic company to market a branded drug prior to the expiration of the patent.
According to PhRMA, the study showed that "the presence of authorized generics increased savings to the overall health care system by a total of $212.8 million across the 9 case studies examined during the 6-month exclusivity period." Calling authorized generics "a win-win for patients," PhRMA's vice president Lori Reilly said that availability of these drugs can "increase competition and result in lower prices for consumers and the overall health care system."
Officials at the Generic Pharmaceutical Association (GPhA) disagreed, arguing that the practice of marketing authorized generics acts to delay prescription drug price reductions for millions of Americans. "As other loopholes in the Hatch-Waxman Act have been closed, brand pharmaceutical companies have turned to the use of authorized generics to create a chilling effect on generic companies pursuing future patent challenges," GPhA said in a statement responding to PhRMA's claims. "Authorized generics will lead to delayed generic competition and a substantial reduction in savings for all consumers and America's health care system."
Calling authorized generics "nothing more than brand pharmaceutical products masquerading as generics," GPhA said that the practice is employed by branded drug patent holders "to manipulate the market in a manner that interferes with competition from the true generic product."
In calling for new federal legislation to close the authorized generics loophole in the Hatch-Waxman Act, GPhA warned that, if this practice is allowed to continue unchecked, it may "severely curtail future patent challenges, allowing brand companies once again to evergreen patents and substantially delay consumer access to affordable medicine."