Senate Panel Approves Generic Drug Bill

Legislation designed to get generic drugs to store shelves more quickly and save consumers billions of dollars won unanimous approval of the Senate health committee Wednesday.

Committee chairman Sen. Judd Gregg, R-N.H., said the bill, "a victory for every person in America who has ever used a prescription drug," may be attached to a $400 billion Medicare prescription drug bill (search) the Senate is to take up next week.

The generic drug bill, stopped in past years by partisan differences and industry opposition, has picked up momentum this year, gaining cross-party support and industry acceptance. The main Senate sponsors, along with Gregg, are the committee's top Democrat, Sen. Edward Kennedy of Massachusetts, Sen. Charles Schumer, D-N.Y., and Sen. John McCain, R-Ariz.

The bill would change a 1984 law that was intended to encourage generics while protecting the viability of name-brand companies that carry out research into new drugs. Schumer said the law has led to name-brand pharmaceuticals using delaying tactics to keep generics off the market and spending "too much time extending patents and not enough time innovating new drugs. This bill will restore that balance again."

The bill would allow only one 30-month stay delaying Food and Drug Administration (search) action on a generic drug application. The delay is triggered when a name-brand company sues the generic drug maker, claiming the generic application infringes on a patent on a blockbuster drug. Currently the brand-name company can use repeated 30-month stays to keep a generic off the shelves.

The first maker of a generic product to come to market now has 180 days of exclusivity, leading to abuses in which the brand-name maker pays its competitor not to enter the market. The bill would forfeit exclusivity for companies that enter anticompetitive deals or fail to come to market in a timely fashion.

The bill would also allow the generic company to file a counterclaim when sued by a brand-name firm.

The Pharmaceutical Research and Manufacturers of America (search), which has opposed the legislation in the past, said it would review the Gregg bill in light of new rules on the issue proposed by the FDA. PhRMA president Alan Holmer, in a statement, added that the industry group believes the current law "works well for patients and that further legislation is unnecessary."

Schumer said the legislation would strengthen the new FDA rules and that attaching it to the Medicare prescription drug bill, one of the most important measures Congress will take up this year, will force the House to consider it.

Reps. Jo Ann Emerson, R-Mo., and Sherrod Brown, D-Ohio, plan to introduce the Senate bill in the House as early as next week.

Money saved from increased generic drug use could go to strengthening the Medicare prescription drug package. "I expect the legislation we pass today to be a key part of those Medicare reforms, bringing down the cost of prescription drugs and stretching Medicare dollars to meet more needs for more seniors," Kennedy said.

Gregg said the exact savings from their bill is still being studied. It was estimated that a similar bill that passed the Senate last year would save about $60 billion over 10 years, about $6 billion for the government and the rest for consumers.

Christine Simmon of the Generic Pharmaceutical Association (search) said better access "translates into billions of dollars of savings" for consumers, employers, insurers, government and others paying for health care. "It really has an impact on the entire health care system."