Generic—and Biogeneric—Medicines Set to Play Important Role in Health Care

As the new administrationand new Congress begin toaddressthe challenges facingour nation,Americans will beawaiting action on both our nationaleconomy and on health care reform.Although some think that health caremay take a backseat to putting oureconomy back on track, the truthis that the economic health of ournation is strongly tied to the health ofthe American worker.

Escalating health care costs havereached crisis proportions as theeconomy spirals downward. All acrossAmerica, patients are strugglingto obtain the care they need. Someare delaying doctor's appointments.Others are skipping vital medicines.For almost a quarter of a century,generic medicines have proven to savepatients and the government billionsof dollars annually. In 2009, increasingaccess to generic—and biogeneric—medicines will ensure that Americansare receiving quality health care ataffordable costs.

The new administration and Congresshave the extraordinary opportunity tocreate history in 2009 by reforminghealth care and passing biogenericslegislation to bring affordable lifesavingmedicines to patients in need.

25 Years of Savings

2009 will mark the 25th anniversary ofthe landmark Hatch-Waxman Act thatbrought safe, effective, and affordablegeneric medicines to patients. Thegeneric pharmaceutical industry haschosen as its slogan for this anniversary:"Celebrating the Past, Defining theFuture." The value of the contributionof generic medicines to affordablehealth care is clear from the purchasingdecisions consumers make everyday.

Generic medicines are used to fill>65% of all prescriptions, yet the costto patients, insurers, and the governmentis just 16% of the total amountspent for prescription medicines. Withan average $85 difference between theprice of a brand prescription and theprice of the generic, the savings areclear.

Opportunity to Increase Savings

Although a rate of 65% substitution isimpressive, the generic pharmaceuticalindustry believes that increasingthe use of generic medicines offers thenew administration additional opportunitiesfor savings. For example, a 1%increase in the use of generic medicinesin Medicaid programs could generatean additional savings annuallyof approximately $400 million, withnearly half of that savings captured byembattled state governments whosebudgets are reeling under the currenteconomic crisis.

The generic pharmaceutical industrystrongly supports the increased use ofgeneric medicines to help lower costs.We also are committed to workingclosely with the Obama administrationand Congress to increase timely patientaccess to generics, including the approvalof a pathway for safe and affordablebiogenerics. In addition, we support initiativesthat would increase funding forthe FDA Office of Generic Drugs to getapproved generic medicines to patientsin a more timely fashion.

Biogenerics: Defining the Future

Looking ahead, the introduction of biogenericscould result in even moresubstantial savings for patients, withestimates ranging from $14 billion toas much as $67 billion within the firstdecade of competition. Given theseestimates, it is clear that competitionfrom biogenerics will create savingsthat dwarf those generated by traditionalgeneric pharmaceuticals for bothpatients and government since 1984.

The generic pharmaceutical industryis committed to working with Congressto commemorate the 25th anniversaryof Hatch-Waxman with the approvalof a workable pathway that will creategeneric competition in biologics. TheObama administration and Congresshave the extraordinary opportunity tocreate history again.