2012 Budget seeks more safety, faster access to lower-cost drugs

March 1, 2011

In the White House Budget, President Barack Obama targets the high cost of prescription drugs and proposes 2 significant changes for improving consumer access to less-expensive generic drugs.

The White House Budget released by President Barack Obama reports a proposed total of $892 billion for the Department of Health and Human Services (HHS), down from $909 billion budgeted for the current year. The President targets the high cost of prescription drugs and proposes 2 significant changes for improving consumer access to less-expensive generic drugs.

First, new authority granted to the Federal Trade Commission (FTC) would stop current “pay-for-delay” tactics, deemed anticompetitive for generic drug production. Second, the Administration proposes to reduce patent exclusivity for branded biologics, which would bring generics to consumers faster. Representing their respective constituent interests, the Generic Pharmaceutical Association (GPhA) and the Pharmaceutical Research and Manufacturers of America (PhRMA) issued public comment in response. 

“GPhA applauds the President for urging that the exclusivity period for branded biologics be reduced to 7 years. There is no question that a 12-year exclusivity period would provide unwarranted monopolies for brand biopharmaceuticals, which would delay the savings that could result from the earlier introduction of biogenerics.”

PhRMA responded with "The President's proposal to reduce the 12 years of data protection - the law’s only bipartisan provision - would disrupt this balance, seriously threatening innovative companies' ability to fund research on future treatments and cures.”

GPhA criticized the pay-for-delay proposal, which is projected to save $540 million beginning in 2012 and to reach $8.8 billion in savings through 2021, adding that the FTC “already has the authority to review and reject any patent settlement, and that its challenges to the validity of settlements has been consistently and soundly rejected by the Courts.”

GPhA asserted that an analysis performed in August 2010 discovered that calculations of estimated savings were based on flawed assumptions used by the Congressional Budget Office.

In the Budget, new fees were proposed to help ensure access, health safety, and security. A new generic drug-user fee would allow FDA to charge generic companies and would “improve review times and reduce the current backlog of [generic drug] applications.” The current wait-list time for approval of the 2,361 original Abbreviated New Drug Applications is 31 months.

A proposed “reinspection fee for medical products” would authorize FDA to charge the cost of the required follow-up reinspection to manufacturing facilities found in violation of Good Manufacturing Practice during inspection. Finally, a proposed new “international courier use fee” would allow increased FDA surveillance of imported medical products through an additional charge to international couriers.

Other highlights of the HHS budget include support for reforming Medicare payments to physicians to improve quality and efficiency; investments in the training and support of providers who choose to enter the primary care field in medically underserved areas; and permission allowing the Centers for Disease Control and Prevention, along with individual states, to transfer their funds across programs for HIV/AIDS, tuberculosis, hepatitis, and sexually transmitted diseases, in order to improve and better integrate care.

The full document and budget line-item details can be found at

.