Generic industry on cusp of new growth spurt

March 20, 2006

Authorized generics. Patent reform. Biodefense legislation. Funding for the Office of Generic Drugs (OGD). These are some of the challenges, opportunities, and issues that the Generic Pharmaceutical Association will continue to tackle in 2006 in order to lead America into a healthy future. This message was delivered by Kathleen Jaeger, GPhA president/CEO, to attendees of the association's annual meeting held recently in Boca Raton, Fla.

Reflecting on GPhA's agenda for 2005, which included Medicaid reform, Jaeger said GPhA met with Congressional representatives, governors, and other state lawmakers to encourage the adoption of "sensible measures to increase the use of generic medicines." GPhA's message: A 1% increase in the use of generics nationwide could save consumers $4 billion a year.

Rebates were also on GPhA's 2005 agenda. Jaeger said that while Congress considered increasing the federal rebate standard from 11% to 17%, "we and the American consumers won that battle. Congress realized that generics operate on a very different business model than brand drugs and put the proposal where it needed to be-in the trash can."

Yet another burning issue for GPhA has been fighting authorized generics. Dubbing authorized generics "brand-name products masquer- ading as generics," Jaeger said, "They take advantage of a loophole in federal law. If left unchecked, authorized generics could result in fewer affordable medicines coming to the market in the future."

Jaeger praised an ongoing Federal Trade Commission study on the competitive effects of the use of authorized generics and applauded the budget reconciliation bill, which goes into effect in 2007. "The bill clarifies the Centers for Medicare & Medicaid Services' treatment of authorized generics," she said. "That change will ensure that the government won't overpay for these drugs and should save millions of dollars annually."

In 2006 GPhA will be busy opposing passage of the Patent Reform Act of 2005. "As proposed, it would make sweeping changes to the way patents are filed and how questionable patents are challenged. GPhA will continue to caution Congress not to move too quickly on patent reform," asserted Jaeger.

While GPhA supports biodefense legislation aimed at enhancing our nation's preparedness, Jaeger cautioned, "It's wrong to extend market monopolies for everyday medicines under the guise of biodefense preparedness. Yet this is what some on Capitol Hill have suggested. If such a law were passed, Americans would be forced to pay higher prices for years for drugs already in today's medicine cabinets, and Americans would have a false sense of security."

Jaeger told attendees that the United States needs the tools to create a biodefense-pharmaceutical sector. These tools include product liability, guaranteed purchasing, fast-track review, and full funding for clinical trials. She assured members that GPhA will adamantly oppose monopoly extensions that would lead to higher drug prices without improving our nation's overall preparedness.

This year GPhA plans to work on increasing funding for OGD. "We'll work with the Department of Health & Human Services and the Food & Drug Administration to ensure that dubious petitions do not needlessly delay the approval of affordable medicine," added Jaeger.

Finally, Jaeger encouraged members not to neglect the international arena. GPhA will become active in the international trade agency committees ITAC 3 and ITAC 15 and will continue to work with Colombia and Thailand and other potential trading partners to "stop the brand industry from making backdoor changes that rescind access to affordable medicines to citizens around the world and here at home."

Calling generic biopharmaceuticals the next revolution in health care, Jaeger emphasized that Australia and the European Union have outpaced America in this area. She criticized the FDA for not moving swiftly to establish an effective and efficient generic biopharmaceutical approval process.

Jaeger concluded on a positive note, stating that the generic industry is on the cusp of a growth period. "2006 will mean more opportunities for Americans to save money through increased access and use of affordable medicines. Our industry will continue to lead America into a healthy future."