Gregg's Prescription Drug Plan Passes Senate

By Judith Smelser on Friday, June 20, 2003.

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A major prescription drugs initiative, co-authored by New Hampshire Senator Judd Gregg, passed the Senate yesterday with an overwhelming majority.

The measure closes loopholes in current law that delay the arrival of cheaper generic drugs to the marketplace.

The plan passed as an amendment to the medicare reform bill currently being debated in the Senate.

NHPR's Washington correspondent Judith Smelser reports.

The amendment passed with a vote of 94 to 1 - a major victory for the bipartisan generic drugs plan.

Senator Gregg says the measure will allow cheaper drugs to be available to more people.

"It will make drugs available to folks at a reasonable price, it will make them available in a prompt and quick way, it will make it a less litigious exercise, and it will continue to encourage innovation."

As of 2000, the average cost of a brand-name prescription drug was $65.29, while the average cost of a generic was just 19.33.

That's according to statistics cited by the amendment's sponsors.

Generics makers say current law helps brand-name companies keep the cheaper drugs off pharmacy shelves.

This amendment addresses many of their complaints.

Under current law, for example, a brand-name company can delay government approval of a generic drug for 30 months by filing a patent infringement lawsuit.

Ron Pollack is the executive director of Families USA, a health care consumer advocacy group.

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"That's two an a half years where prices are sky high and no competition and then they can do it all over again, so in perpetuity, they can control this drug and essentially have a monopoly about it."

Pollack says in many cases, the brand-name companies file frivolous patents, based on the color or size of the pill, for example, and obtain additional 30-month delays through those patents.

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"This legislation says they only have one 30-month delay. Now I don't like that at all, I dont' think there should be any such delay, but at least this ability to keep on filing new frivolous patents and new frivolous lawsuits and piling one 30 month delay upon another - that would come to an end."

CURRENTLY BRAND NAME COMPANIES CAN MAKE DEALS WITH generics manufacturers TO keep the cheaper drugs off the market.

A provision in current law grants 180 days of exclusivity to the first generic copy of any given drug.

No other COPIES can come to market during that time.

But in some cases, name brand companies have paid the generic manufacturer not to come to market at all.

Under the new amendment, the generic company would have to start selling its drug within 75 days of winning government approval, or forfeit the exclusivity period.

The brand-name pharmaceutical companies are not happy about THAT PROVISION.

The Pharmaceutical Research and Manufacturers of America - the industry's lobbying group - says the current law strikes a good balance between lowering prescription drug costs and encouraging innovation by the brand-name companies.

Spokesman Jeff Trewhitt says the generic industry has fared well under that law, which came into effect in 1984.

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"Since 1984, about 10,000 generic drugs have been approved to go on the market. The portion of the marketplace in the US that is generic has increased dramatically from about 19% in 1984 to about 52% today."

Trewhitt also says many of the anti-competitive practices that the amendment seeks to end happen much less frequently than the generic companies would have people believe.

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"The Federal Trade Commission came out a year or so ago with a report taking a look at the process, at the system if you will. And they cited 8 problematic examples involving 7 drugs. At the time that the Federal Trade Commission Report came out, between 6,000 and 8,000 generic drugs had been approved. // It strikes me that the system has worked pretty well."

His organization, known by its initials as Phrma, wants to sit down with Senator Gregg and the other sponsors of the amendment to suggest certain "technical changes" to the legislation.

BUT Phrma may have been surprised to see Gregg's name on this plan in the first place.

A similar measure passed the Senate last summer but was staunchly opposed by the New Hampshire Republican.

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"Last year's bill created a lot of new causes of action, which would have created a minefield of litigation and in my opinion would've maybe been a lawyers relief act but wouldn't have done a whole lot for the purpose of bringing drugs to the market faster and at a cheaper price."

Gregg says this year's version has cleared up those problems.

He also says the White House has responded positively to the new plan.

The Administration opposed last year's bill and lobbied successfully to kill it in the House of Representatives.

Gregg hopes that the strong bipartisan support for the new version will help push it over those formidable hurdles.

BUT SINCE HIS AMENDMENT WAS ATTACHED TO THE MEDICARE REFORM BILL, THAT TOO HAS TO PASS.

For NHPR News, this is JS in Washington.