News that prescription medicines have become the fastest-growing sector of healthcare outlay in the US will add strength to proposals by the Bush Administration to ease regulations on generic production of brand-name drugs. According to a survey released in December by Mercer Human Resource Consulting, the cost of American healthcare rose by 15% last year, the largest increase since 1990. Individuals paid an average of $10 for generic drugs and $35 for brand-name drugs.
The previous month, US Secretary of Health and Human Services Tommy Thompson announced plans to eliminate legislation that allows pharmaceutical companies to invoke a 30-month delay on generic copies being produced. This rule gave innovator drug companies the chance to protect their patent rights in court. However, companies have frequently invoked multiple 30-month delays, indefinitely delaying approval of generic drugs. Thompson's new rule would end that possibility.
Around 40% of drugs currently sold are generic copies. Between now and 2006, patents are set to expire on four times as many drugs as normal during that time period, making them susceptible to copying without even a 30-month delay period.
As Nature Medicine went to press, the Pharmaceutical Research and Manufacturers Association (PhRMA), which represents much of the pharmaceutical industry in the US, was expected to lodge its opposition to removal of the 30-month rule. PhRMA's view is that allowing faster access to cheaper generics discourages drug makers from investing huge sums into the research and development of new and potentially breakthrough compounds.
PhRMA claims its members spent more than $30 billion in 2001 discovering and developing new medicines, and should be allowed to reap the profits from those investments. For example, the patent on Merck & Co.'s successful osteoporosis drug Fosomax was recently challenged by two generic drug makers, Teva and Ivax Pharmaceuticals. The court ruled that Merck's patent on the drug, which generated $455 million in sales last quarter, was valid until August 2007.
But Thompson insists that the change "would bring relief from the high prices that American consumers frequently pay for prescription drugs." Citing his own dollar figures, he predicts that the rule "could save consumers approximately $3.5 billion every year."
