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By Mr. ROCKEFELLER (for himself, Mr. SCHUMER, Mr. KOHL, Mr. LEAHY, Mr. BROWN, and Mr. INOUYE):
S. 501. A bill to amend the Federal Food, Drug, and Cosmetic Act to prohibit the marketing of authorized generic drugs; to the Committee on Health, Education, Labor, and Pensions.
Mr. ROCKEFELLER. Mr. President, I rise today with Senators SCHUMER, KOHL, LEAHY, and BROWN to reintroduce an important piece of legislation, the Fair Prescription Drug Competition Act. Our legislation eliminates one of the most prominent loopholes that brand name drug companies use to limit consumer access to lower cost generic drugs; it ends the marketing of so-called ``authorized generic'' drugs during the 180-day exclusivity period that Congress designed to specifically allow true generics to enter the market.
An authorized generic drug is a brand name prescription drug produced by the same brand manufacturer on the same manufacturing lines, yet repackaged as a generic. Some argue that authorized generic drugs are cheaper than brand name drugs and, therefore, benefit consumers. In reality, authorized generics only serve to reduce generic competition, extend brand monopolies, and lead to higher health care costs for consumers over the long-term. As I have said many times, authorized generics are a sham. They are brand name prescription drugs in disguise.
After up to 20 years of holding a patent for a brand name drug, the manufacturer doesn't want to let go of their enormous profits. So, they repackage the drug and refer to it as a generic in order to achieve a very simple goal--to drive true generics out of the market by offering the drug at a lower price initially; then, when victory is assured, raising the cost on the so-called ``authorized generic'' to gain a larger profit. This is a huge problem and one that is becoming even more prevalent as patents on some of the best-selling brand name pharmaceuticals expire.
In 1984, Congress passed the Hatch-Waxman legislation to provide consumers greater access to lower cost generic drugs. The intent of this law was to improve generic competition, while preserving the ability of brand name manufacturers to discover and market new and innovative products. Over time, brand name manufacturers found ways to exploit certain loopholes in the Hatch-Waxman law to the detriment of generics.
As a result, Congress enacted amendments to the Hatch-Waxman Act as
part of the 2003 Medicare prescription drug law. These amendments were designed to close long-standing loopholes that were delaying generic competition and hindering consumer access to lower-cost generic drugs. These reforms were also intended to strengthen the 180-day period of market exclusivity for generic manufacturers that pursue costly patent challenges.
The Hatch-Waxman Act and the additional reforms included in the 2003 Medicare law provide crucial incentives for generic drug companies to enter the market and make prescription drugs more affordable for consumers. As health care spending continues to skyrocket, finding ways to reduce costs is crucial. Today, generic medications comprise more then 56 percent of all prescriptions in this country, but they only generate 13 percent of our Nation's drug costs. Furthermore, generic drugs are 50 percent to 80 percent cheaper than brand name drugs. In fact, generic drugs save consumers an estimated $8 to $10 billion a year at retail pharmacies. For working families, these savings can make a huge difference, particularly during a recession. We must protect the true intent of the Hatch-Waxman Act and increase access to affordable prescription drugs for all Americans. The Fair Prescription Drug Competition Act does just that by eliminating the authorized generics loophole, protecting the integrity of the 180 days, and improving consumer access to lower cost generic drugs.
I urge my colleagues to support this timely and important piece of legislation.
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