A Message from Kathleen Jaeger: New Year, New Congress, New Hope for Generics

FEBRUARY 01, 2007

This year is going to be a busy one for the generic pharmaceutical industry, with the new Congress making health care a top priority. As Congress grapples with controlling escalating health care costs and increasing access to quality care, issues impacting our industry will be front and center in the debate.

Congress has a real opportunity to increase patient access to safe, effective, and affordable generics during this session. Among the many issues on its plate, the new Congress must reauthorize the Prescription Drug User Fee Act (PDUFA), the Pediatric Research Equity Act (PREA), and the Trade Promotion Act (TPA).

Perhaps the liveliest debate will be centered on the need for the FDA to create a clear and effective abbreviated pathway for the approval of generic biopharmaceuticals. Biopharmaceuticals are everyday medicines used to treat conditions such as heart disease, rheumatoid arthritis, and cancer, yet their costs are incredibly high?sometimes as much as $200,000 per patient per year. Generic biopharmaceuticals would bring competition into the health care system, reduce costs, and increase patient access. That is why groups like AARP, the Consumer Federation of America, and the American Federation of Labor and Congress of Industrial Organizations are all supporting legislative efforts to bring more affordable versions of these medicines to patients.

PDUFA will also be a topic of much discussion on Capitol Hill. As part of PDUFA, the FDA has floated the idea of requiring that generic drug companies pay user fees to help fund the agency. The generic industry is open to talking about any options that would bring more affordable medicines to patients faster, but user fees cannot be discussed in a vacuum. Paying user fees will not get drugs to patients faster as long as barriers such as authorized generics and citizen petitions exist.

That is why Congress needs to address the practice of authorized generics. When the Hatch-Waxman Act was created, Congress granted a 180-day period of exclusivity to generic companies to encourage competition and ensure that checks and balances are built into the approval system. Authorized generics have undermined congressional intent, however, by devaluing the 180-day exclusivity period, which is a critical incentive to bring generics to market in a timely manner.

Brand companies also use citizen petitions to stall generic approvals. According to a Merrill Lynch review of petitions filed between 2000 and 2005, 76% were dismissed by the FDA as having no merit. These needless delays in approvals cost patients and the health care system millions of dollars. It is time for Congress to close these loopholes.

Another measure that must be renewed is the PREA. The generic industry strongly supports the goal of the act?to provide greater access to pediatric medicines?but we need to address the serious lack of clinical information on the safe and effective use of these medicines in children. As it considers renewing the act, Congress must determine whether the American health care system is receiving the best clinical research and information in return for an additional 6 months of exclusivity for the entire family line of the product studied.

Finally, Congress will be debating the TPA this year. Unfortunately, most free trade agreements go beyond US law by providing more intellectual property rights to the brand industry through brand patent extensions and market exclusivity provisions. Even worse, these free trade agreements do not include one mandatory generic access provision. Quite simply, these agreements can harm patients by delaying access to generics.

In reauthorizing the TPA, Congress can put patients back on the playing field. It can require that the Office of the US Trade Representative maintains a balance between pharmaceutical innovation and access to affordable medicines from the start of their trade negotiations. Failure to balance the need for both pharmaceutical innovation and access will hurt America's economy, the health care system, and the availability of affordable medicines worldwide.

The year 2007 can truly be a watershed year for Congress?and patients? to reduce health care costs and increase access to affordable generic medicines. It will be a busy session, but Congress has a real opportunity to remove barriers to accessing quality care and put control and choice in the hands of patients.

Kathleen Jaeger, GPhA president and chief executive officer