Bush Plans To Revise Drug Patent System Could Create Potential for Abuse, PhRMA Says

The Pharmaceutical Researchers and Manufacturers of America last week said in comments filed with the FDA that regulations proposed by President Bush to reduce patent protections for brand-name treatments could lead to "gamesmanship" by generic drug companies, the Wall Street Journal reports (Adams, Wall Street Journal, 12/26/02). The proposed rules include a provision that would reinterpret the 1984 Hatch-Waxman Act, which allows brand-name pharmaceutical companies to delay competition from generic drug companies. Under current law, the FDA provides brand-name pharmaceutical companies with a 30-month stay on patent protection when generic drug companies challenge their patents. The proposed regulations, which would not require congressional approval, would limit brand-name pharmaceutical companies to one 30-month stay per patent; current law allows the companies to receive multiple patent stays (Kaiser Daily Health Policy Report, 10/22/02). PhRMA said that the "potential for abuse is real" under the proposed rules, which the group said that generic drug companies could use to "deprive (brand-name companies) of a meaningful opportunity to obtain even a single 30-month stay." In addition, PhRMA said that the proposed regulations could allow the approval of generic treatments "without the innovator company's having a fair opportunity" to defend patents and would "have a substantial impact on the innovator-drug industry." However, the Generic Pharmaceutical Association, which also filed comments with the FDA last week, called the proposed regulations a "first step" to patent law reform (Wall Street Journal, 12/26/02). Kathleen Jaeger, president of GPhA, said in a statement, "Reform not only must prevent gaming of the system, it must also ensure early resolution of legitimate patent disputes between generic and brand companies, so that consumers have timely access to generic drugs" (Bloomberg News/Boston Globe, 12/27/02). The FDA, which must "reconcile the conflicting views" of the two groups, will likely issue final rules in early 2003, the Journal reports (Wall Street Journal, 12/26/02).

Increased Generic Rx Costs
In related news, the New York Times last week examined the cost of generic treatments -- which has increased "almost twice as rapidly as prices of brand-name drugs" in the past few years -- a trend that will likely continue as a number of popular brand-name treatments lose patent protection in the next few years. Analysts attribute the increased costs of generic treatments to the recent rise in the number of medications on the market; generic drug companies often charge more for the first generic version of a treatment that reaches the market. The recent consolidation of generic drug companies also has left fewer companies to compete over the prices of older generic treatments. In addition, prescription drug wholesalers, pharmacy benefit managers and pharmacies have found they can earn higher profits on generic treatments than brand-name medications and "still offer prices that are typically well below those of brand-name drugs," the Times reports. Ronald Pollack, executive director of Families USA, said, "Generic drugs provide a considerable economic benefit to consumers. The benefit often turns out to be considerably less than it could be" (Freudenheim, New York Times, 12/27/02).