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Consumer Group Critical of House for Failing to Take Up Legislation Easing Access to Lower-Priced Generic Drugs

Oct. 9, 2002

Consumer Group Critical of House for Failing to Take Up Legislation Easing Access to Lower-Priced Generic Drugs

Today’s Hearing on Drug Competition Is a Fig Leaf for Inaction

WASHINGTON, D.C. — Public Citizen today criticized the leadership of the U.S. House of Representatives for failing to act on legislation that would assure consumers timely access to lower-priced generic drugs. That access could save consumers and government programs $60 billion over 10 years.

The Greater Access to Affordable Pharmaceuticals Act (GAAP) passed the Senate in July by a 78-21 vote, with almost all Democrats and a majority of Republicans voting in favor. In the House, however, the legislation has been neglected by the committee of jurisdiction since being introduced in May. Now, instead of marking up the bipartisan Senate-passed legislation, the Energy and Commerce Committee’s Health Subcommittee today is holding a hearing to investigate the problem of “competition” in the pharmaceutical marketplace.

“Consumers do not need Congress to study drug industry competition,” said Frank Clemente, director of Public Citizen’s Congress Watch. “They need legislative relief from high drug costs. It appears that the drug industry’s hefty campaign contributions and well-oiled lobbying operation have succeeded in persuading Republican leaders to block passage of this pro-consumer bill. This hearing is just a fig leaf to cover up inaction.”

The high cost of prescription drugs is a significant problem for consumers. In 2001, the 50 top-selling drugs, such as Celebrex, Accutane and Allegra, posted average price increases almost three times greater than the rate of inflation. Timely access to generic drugs, which contain the same active ingredients as their branded counterparts and sell for 20 to 50 percent less, can mean significant savings for consumers. In July, the Congressional Budget Office found that the Senate-passed GAAP Act would save consumers and government health programs $60 billion over 10 years by closing loopholes in the law exploited by brand-name drug companies to prevent generics from coming to market.

The Senate-passed legislation’s most important pro-consumer elements, which are embodied in H.R. 5311, sponsored by Reps. John Thune (R-S.D.) and Jo Ann Emerson (R-Mo.), and H.R. 5272, sponsored by Reps. Sherrod Brown (D-Ohio) and Henry Waxman (D-Calif.), would:

  • Limit brand-name drug companies to one 30-month stay of generic competition. Under current law, brand-name drug companies can receive multiple, automatic 30-month stays that prevent lower-cost generic drugs from coming to market. All a brand-name company must do to obtain a stay is claim in court that a generic drug would infringe on one of its patents if it went to market. The GAAP Act would limit brand-name drug companies to one automatic 30-month stay.
  • Create protections against the abuse of the automatic 30-month stay.
  • Establish deadlines for filing patents eligible for the automatic 30-month stay.

Only patents that are declared and listed by brand-name drug companies with the U.S. Food and Drug Administration (FDA) up to 30 days after the time of approval of the brand-name drug would be eligible for the automatic 30-month stay.

Much of the mischief done by brand-name drug companies is done with late-listed patents. For example, the day before Bristol-Myers Squibb’s primary patent on its anti-anxiety drug BuSpar was scheduled to expire, the company obtained another patent on a metabolite – a breakdown product of the drug created naturally in the body. Consumers were deprived of a lower-priced generic alternative for almost half a year. Mylan Laboratories, a generic competitor that was about to ship an alternative to BuSpar on the day that Bristol-Myers Squibb’s primary patent was set to expire, literally had to unload its delivery trucks. Under the GAAP Act, Bristol-Myers Squibb’s late-listed metabolite patent would not have been eligible for an automatic 30-month stay.

  • Remove legal barriers preventing bogus patents from being challenged in court.

Under current law, brand-name drug companies can file frivolous patents with the FDA to secure additional 30-month periods free from competition against their high-priced products. The GAAP Act would give generic companies the ability to challenge the listing of bogus patents with the FDA in court before they can become the basis for an automatic 30-month stay.

Together, these protections would ensure that generic drug companies could clear away legal obstacles preventing lower-cost generic drugs from coming to market. Not only will generic drug companies have the tool they need to stop bogus patents from interfering with bringing generics to market, but the requirement for the timely listing of patents will ensure that generic companies will have the time to go to court to challenge bogus patents that could become the basis for an automatic 30-month stay.

  • Stop collusion between generic and brand-name drug companies that delays consumer access to lower-cost generics. The GAAP Act changes the law so that brand-name drug companies will no longer be able to stop all competition to their products by paying one generic company to stay off the market.