[Ip-health] Dow Jones Newswires: Obama Budget Seeks To Speed Entry Of Generic Drugs
thiru at keionline.org
Tue Feb 15 21:42:11 PST 2011
• FEBRUARY 14, 2011, 5:12 P.M. ET
UPDATE: Obama Budget Seeks To Speed Entry Of Generic Drugs
(Updates with additional reaction.)
By Brent Kendall Of DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)--The Obama administration's 2012 budget
blueprint released Monday seeks to speed up the availability of
generic drugs and projects billions in federal health-care savings if
the cheaper medicines are allowed on the market more quickly.
The White House budget included two proposals that could introduce
early price competition to brand-name drugs by generic rivals.
One would allow the U.S. Federal Trade Commission to stop
controversial settlements in which brand-name drug companies pay their
generic competitors to drop patent challenges that could lead to early
entry of generic drugs.
A second proposal would hasten the availability of generic biologic
drugs by reducing the market exclusivity period for brand biologics to
seven years from 12 years.
Biologic drugs are complex and expensive medicines derived from
proteins manufactured in living cells. Traditional drugs are made by
The proposals have run into previous opposition in Congress amid
extensive industry opposition.
John J. Castellani, president of the Pharmaceutical Research and
Manufacturers of America, said the Obama budget would diminish crucial
incentives for future U.S. medical innovations.
"While we understand the need to reduce the deficit, policies such as
these represent the wrong approach," Castellani said in a statement.
Jim Greenwood, president of the Biotechnology Industry Organization,
said a reduction in market exclusivity for biologic drugs is "not
going to happen."
Greenwood said his industry demonstrated in the last Congress that it
had a political coalition to support 12 years of exclusivity. "Now we
have a Republican majority in the House; they are not going to stand
for backtracking on biosimilars," he said. "I don't believe the Senate
The Generic Pharmaceutical Association offered a mixed response to the
president's proposals. The group applauded his plan to reduce the
exclusivity period for biologics but criticized the administration's
proposal to eliminate the drug-patent settlements as "misguided."
Both brand-name and generic drug makers have defended the patent deals
as pro-competitive, saying they can lead to early introduction of
generic drugs while eliminating the uncertainty of patent litigation.
The FTC has led the charge against the patent deals, saying brand-name
drug makers have paid generics handsomely to sit on the sidelines.
"At a time when the government is making tough choices on spending, it
is a matter of simple common sense to stop these sweetheart deals
between pharmaceutical companies that needlessly increase government
spending on prescription drugs by billions of dollars," FTC Chairman
Jon Leibowitz said in a statement.
The Obama administration has backed both proposals previously, but did
not include them in last year's budget submission. Notably, the White
House used both proposals Monday in its projections of government
savings over the next decade.
The administration said allowing the FTC to ban anticompetitive drug
patent settlements would save federal health-care programs $8.79
billion over 10 years.
Those projected savings appear far higher than estimates published by
the Congressional Budget Office in 2010. The CBO, which analyzed a
similar proposal in the Senate, found the legislation would have saved
the government $2.7 billion over 10 years.
The White House estimates, however, are lower than those previously
offered by the FTC's Leibowitz, who has predicted that banning the
patent settlements would save government health-care programs roughly
$12 billion over the next decade.
The FTC's savings projections, which found that American consumers
would save $35 billion over 10 years, were criticized as flawed by the
The White House also projected Monday that federal health-care
programs would save $2.34 billion over the next 10 years if generic
biologic drugs are allowed on the market after seven years.
-By Brent Kendall, Dow Jones Newswires; 202-862-9222; brent.kendall at dowjones.com
--Thomas Gryta contributed to this article.
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