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Legislation Passes Key Senate Committee Giving Windfall Profits to Drug Makers and Failing to Assure Safety of All Kids’ Drugs



August 1, 2001

Legislation Passes Key Senate Committee Giving Windfall Profits to Drug Makers and Failing to Assure Safety of All Kids’ Drugs

Group Urges Support for Amendments by Sens. Kennedy, Clinton & Wellstone as Legislation Heads to Senate Floor

WASHINGTON, D.C. — Today the Senate Health, Education, Labor and Pensions Committee passed legislation sponsored by Sens. Chris Dodd (D-Conn.) and Mike DeWine (R-Ohio) that would give drug companies a six-month extension on their lucrative monopoly patents just for testing the safety of such drugs in children. Dodd’s legislation, however, fails to assure that all drugs likely to be used in children will be tested for safety prior to marketing.

Monopoly extensions first were made available to drug companies in exchange for testing in children by legislation sponsored by Dodd and enacted in 1997. The new legislation – the “Best Pharmaceuticals for Children Act,” S. 838 – would continue the practice of granting what is known as “pediatric exclusivity” to the drug companies.

“Unfortunately Sen. Dodd has not taken consumers’ needs for lower priced drugs into consideration in drafting this legislation,” said Frank Clemente, director of Public Citizen’s Congress Watch. “It provides a huge windfall to the drug industry while failing to ensure that all drugs used by children will be tested for safety. This legislation stands as an unfortunate testimony to the power of the drug industry to get what it wants out of Congress – whether from Democrats or Republicans.”

The U.S. Food and Drug Administration (FDA) has estimated that the six months of pediatric exclusivity that would be granted for hundreds of drugs over the next 20 years, as their patents expire, would increase brand-name drug company sales by $29 billion. The cost to consumers would be an additional $14 billion over that time because access to lower-priced generics would be delayed six months.

The profits enjoyed by the drug companies from the patent extensions greatly exceed the cost of conducting the studies. The FDA estimates that drug companies will reap $592 million in additional annual profits under pediatric exclusivity. It also estimates that the annual cost of conducting studies if they had been required between 1993 and 1997 would have been only $80 million, a Public Citizen analysis  of the legislation showed.

Consumer advocates have been appealing to Dodd to change his bill to assure that all drugs likely to be used in children are first tested for safety and to address the higher costs for drugs that his legislation would impose on already-overburdened consumers – particularly the elderly. But Dodd refused to support modest changes to the bill proposed by committee Democrats.

“We are pleased that Senators Kennedy, Clinton and Wellstone offered amendments designed to reduce the cost of this legislation to consumers and require that all drugs that kids need are first tested before they are prescribed for their use,” said Clemente. “This legislation sorely needs such changes. As the bill heads to the Senate floor Public Citizen will oppose this bribe to the country’s most profitable industry and urge that it be amended.”

In addition to Public Citizen, the Dodd-DeWine bill is opposed by the following organizations: Alpha 1 Foundation, Center for Medical Consumers, Consumer Federation of America, Consumers Union, National Consumers League, National Organization for Rare Disorders, National Women’s Health Network, Scleroderma Foundation, U.S. Public Interest Research Group and the United Automobile, Aerospace and Agricultural Implement Workers of America (UAW).