Generic Industry Year in Review

Author: Kathleen Jaeger, GPhA President and Chief Executive Officer

Critical health care issues were front and center in Congress during 2007 and will likely drive the domestic debate in the 2008 election year. Many of these issues affect the generic pharmaceutical industry, pharmacists, and patients across the country.

Looking back at 2007, the generic industry had a very productive year, from the introduction of groundbreaking biogenerics legislation to efforts to stop proposals that would have harmed patient access to safe and affordable generic medicines.

The progress made on legislation to create an FDA approval pathway for biogenerics was extraordinary. More than 70 diverse organizations representing consumers, older Americans, businesses, and patients joined us in the fight to bring lifesaving biogenerics to those in need. And, in spite of intense pressure from our opponents, legislation was approved by a Senate committee within 5 months, which is remarkable progress for new legislation.

Although much work still needs to be done?particularly in ensuring that market exclusivity provisions do not needlessly keep biogenerics from patients? we were pleased by the commitment from lawmakers to move biogenerics legislation forward in 2008. With momentum growing and patients needing access, real potential exists to pass legislation that will give patients timely access to biogeneric medicines.

2007 also saw the enactment of legislation to stop the long-standing practice of brand companies using citizen petitions to keep generics out of the hands of patients. As part of an FDA reform bill signed into law, brand companies will find it more difficult to use citizen petitions to block generic competition. The FDA is now required to review petitions within a 6-month time period and consider generic applications and petitions simultaneously. This important new law took 1 tool out of the brand company arsenal in delaying access to generics.

In addition, great progress was achieved on the trade agreement front. Last spring, Congress and the Bush administration unveiled the bipartisan New Trade Policy for America which took a major step forward in ensuring that our trade agreements recognize the critical balance between ensuring access to safe and affordable medicines and fostering pharmaceutical innovation. This past fall, Congress approved the U.S.-Peru Free Trade Agreement. This new agreement demonstrates that bringing competition into the pharmaceutical marketplace results in lower patient costs without stifling innovation.

In fact, as generic competition has grown in the United States, so has investment by brand companies in new drug development, with new blockbuster drugs regularly coming to market.We are now hearing the federal government saying that the free trade agreements should reflect the balance between access and innovation that the domestic market has achieved.

Additionally, as the backlog of generic drug applications continues to grow, we successfully worked to increase funding for the FDA?s Office of Generic Drugs. We also thwarted an attempt to increase the Medicaid rebate for generic drugs, and convinced lawmakers not to include major windfalls for brand pharmaceutical companies as part of an amendment concerning antibiotics and enantiomers.

Finally, we are spending considerable time on the issue of pharmacy reimbursement and the calculation of the Average Manufacturer Price. While we submitted extensive comments to the Centers for Medicare & Medicaid Services, the final rule published in July 2007 did not address many of our stated concerns. We are working with a coalition that includes the National Association of Chain Drug Stores, the National Community Pharmacists Association, and many others to promote legislation that would revise the rule so that it will not adversely affect patients? access to generic medicines.

We have also been active in state legislatures across the country beating back attempts to pass carve-out legislation. Brand companies are trying to take steps to block generic substitution on various mental health and HIV/AIDS drugs, at substantial cost to states and patients. We were successful in 2007, but we are already seeing signs that brand companies will continue to promote carve-outs in 2008. We will be back to ensure that access is not jeopardized.

It is clear that 2008 will be another busy year for the generic pharmaceutical industry, and we will be delivering the message loud and clear that generics are the right choice for better health.