A Message from Kathleen Jaeger: Generics Help Seniors Avoid Medicare "Doughnut Hole"

DECEMBER 01, 2006
Kathleen Jaeger, GPhA president and chief executive officer

Today, more than 23 million older Americans have transitioned into the Medicare prescription drug benefit program. Although most are pleased with their prescription drug coverage, there are still an estimated 3 million senior citizens who fall into the so-called "doughnut hole"—the period when many Medicare beneficiaries switch from making copayments to paying for all of the costs for their medicines.

Effective January 1, 2007, provisions in the Medicare law will require the program to pay 75% of drug costs up to $2400 and 95% of drug costs over $6250—but beneficiaries will have to foot the bill for all drug costs that fall in between.

Fortunately, generic medicines can provide a parachute for those seniors who are in danger of falling into the doughnut hole. Generics allow seniors to continue to receive the same medicines with the same results, but at a lower cost than with their brand name counterparts. Generics also can help to reduce copayments, since they actually cost seniors—and all consumers—from 30% to as much as 80% less than brands.

Access to generics is important for seniors who are often on a fixed income and are watching health care costs in general, and drug costs in particular, take an increasingly bigger bite out of their wallets. In one recent survey, 26% of senior citizens surveyed stated that they did not fill a prescription, skipped doses, or took smaller doses of medications due to the high cost of drugs.

Last winter, Mark McClellan, MD, PhD, then Centers for Medicare & Medicaid Services administrator, stated that generic medicines are a key part of lowering Medicare prescription drug benefit costs. The AARP is also urging its members to use generic medicines to help delay falling into the coverage gap. Not only will generics assist seniors in leading healthier lives, they also will lower overall costs for the entire Medicare program, allowing scarce health care dollars to be stretched even further.

Yet, there is still more that can be done to help lower prescription drug costs, not only for Medicare recipients, but for the entire health care system. That is why the Generic Pharmaceutical Association (GPhA) is actively encouraging Congress to remove barriers that block seniors—and all Americans—from receiving timely access to generics.

Specifically, GPhA is asking Congress to address the following issues:

•Mandate that the FDA create a clear and efficient abbreviated approval process for generic biopharmaceuticals. There are everyday medicines that do not have affordable generic alternatives because the FDA has not established a review process. The result: countless Americans are denied access to these lifesaving medicines because, without a generic alternative, their costs are simply out of reach. Congressman Henry Waxman (D, Calif) and Senators Chuck Schumer (D, NY) and Hillary Rodham Clinton (D, NY) have introduced legislation to create a pathway to bring affordable generic biopharmaceuticals to consumers.

•Restore the value of the 180-day exclusivity period, which is being threatened by so-called authorized generics and by attacks on the ability of generic companies to settle patent challenges. Brand companies are increasingly using tactics to undermine the 180-day exclusivity period, which Congress established as an incentive to bring more competition into the marketplace. Less competition means higher prices for consumers.

•Increase funding for the FDA's Office of Generic Drugs to bring affordable generic medicines to consumers faster

•Pass the "Lower Priced Drugs Act," introduced by Senators Debbie Stabenow (D, Mich) and Trent Lott (R, Miss), which helps prevent the filing of frivolous citizen petitions that can needlessly delay generic medicines from coming to market

Generic medicines can help keep senior citizens from falling into the doughnut hole, and they can help millions of other Americans control their health care costs. To ensure that the benefits of generics are shared by all, Congress needs to address the obstacles currently facing the generic industry in bringing these life-improving and lifesaving medicines to consumers.