The massive US Senate healthcare reform measure passed on Thursday with support from the multibillion drug industry, but makers of cheaper generic rivals are feeling left out in the cold. Generic drugmakers face several obstacles in the bill backed by Democrats that they worry will dampen a potential increase in use even as more people gain access to health insurance and prescription medicines.
The hurdles include extensive protections against generic versions of pricey biotech medicines, an incentive for Medicare recipients to use more brand-name drugs, and a possible end to payments from brandname makers to delay the launch of copy-cat medicines. "The bill passed by the Senate unfortunately amounts to a treasure trove to brand drug companies," said Generic Pharmaceutical Association President Kathleen Jaeger, whose group represents Mylan, Watson Pharmaceuticals and Teva Pharmaceutical Industries, among other companies.
President Barack Obama has often pointed to generics as a key way to cut costs, but big pharmaceutical makers such as Pfizer and Merck came to lawmakers and the White House with an $80 billion, 10-year pact to cut prices and pay additional taxes to help fund the expansion of health insurance coverage. Generic drug makers are hoping they can influence the final shape of the bill as the Senate version must still be combined with an earlier version passed by the House of Representatives before it becomes law.
To be sure, roughly 30 million more insured Americans are expected under the Senate's $871-billion bill, giving them access to prescription medications, including generics that already make up about roughly 60 percent of the US prescription drug market. But Bill Marth, chief executive of Teva's North American operations, said Democrats missed a chance to further boost use: "It's frustrating," he said.
"Maybe some people have just lost sight of what the bill is supposed to do." Most notable is the setback for generic versions of biotech drugs, also known as biogenerics or follow-on biologics. Like the House bill, the Senate bill gives the Food and Drug Administration power to allow biogenerics onto the US market.
Such protein-based medicines treat cancer and other conditions but can cost tens of thousands of dollars a year per patient. Generic makers welcomed the pathway to approval, but the bills provide for a 12-year period of exclusivity for brand-name drugs before a biogeneric can be approved. The Obama administration had sought just five to seven years of protection.
Most Democratic lawmakers sided with the longer period backed by the branded industry and its lobby group, the Biotechnology Industry Organisation. BIO argued the longer period was needed to recoup development costs. With both the House and the Senate supporting longer protections, that seems unlikely to change during negotiations on the final bill despite calls from generic companies to drop the provision altogether and tackle it separately next year.
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