MAY 01, 2008


State governments grappling with escalating health care expenses should place more emphasis on generic drugs to stretch their budgets, officials at the Generic Pharmaceutical Association (GPhA) said. Responding to a report from the National Governors Association that blamed much of the financial distress on ?steadily rising health care costs,? GPhA said that states that increase access to lower-priced generics will find Medicaid and other health programs more affordable.

?As health care costs escalate, increasing consumer access to generic medicines is the solution to lowering costs while promoting quality care,? GPhA President and Chief Executive Officer Kathleen Jaeger said. ?At costs of 30% to 80% less than brands, generics offer substantial savings for consumers, state governments, and the health care system. In fact, just a 1% increase in the use of generics could save $4 billion annually,? she said.

Specifically, Jaeger called on state officials to reject so-called ?carve-out? legislation that bars generic substitution for various therapeutic classes of medicines. She also called for changes to the Medicaid pharmacy reimbursement rules to ensure that they do not hinder patients? access to generics.


US pharmacists have a definite interest in a new Japanese initiative designed to increase generic drug use in that country. If adopted by Tokyo, pharmacists in Japan will receive cash bonuses of 30% or more for filling prescriptions with generic pharmaceuticals.

Japan?s universal health care program is projected to face a staggering 70% cost increase by 2025, and government officials are looking now at generics as a way to hold down that inflation rate. Although Japanese pharmacists are authorized to substitute generics, only 17% of prescriptions dispensed in that country are filled generically. Generics account for 63% of the drugs dispensed in the United States.


The FDA?s budget for approving generic pharmaceuticals will increase by $6 million next year? extra money that industry leaders hope will enable the FDA?s Office of Generic Drugs (OGD) to cut into the growing backlog of new drug applications. Currently, the FDA is struggling with a backlog of nearly 1300 unprocessed generic drug applications, many of which have been pending for longer than the statutory review time of 180 days.

Although federal law requires the agency to process Abbreviated New Drug Applications for generic medicines in no more than 6 months, the current average time taken by the FDA to approve a generic application is nearly 3 times that long (17 months).

?These additional funds are a good first step toward enabling OGD to hire more reviewers and process generic applications in a timely manner,? said Generic Pharmaceutical Association President and Chief Executive Officer Kathleen Jaeger. ?Generics save consumers and federal and state governments billions of dollars a year,? and the ?investment in the timely approval of generics will reap significant dividends in terms of cost savings and improved health.?


Generic drug maker Teva Pharmaceutical Industries Ltd is increasing its presence in the European pharmaceutical market through an agreement to buy the generic pharmaceutical operations of Bentley Pharmaceuticals Inc for $360 million.

Exeter, New Hampshire?based Bentley is a leading marketer of generic drugs in Spain and also sells to other European Union countries. Officials at Teva said the acquisition will give their company a ?platform to capture a leading position in the fast-growing Spanish generic pharmaceutical market.? A strategic review conducted by Teva last year identified Spain as one of the company?s target markets for future growth.