U.S. Senators David Vitter (R-La.) and Jeff Bingaman (D-N.M.), today introduced a bipartisan amendment to the Food and Drug Administration user fee bill that will help generic manufacturers bring high-quality, lower-priced prescription medications to market in a more timely fashion. In preliminary analysis, CBO projected that enacting the bill would bring generics to market faster and is expected to save American consumers and the federal government at least hundreds of millions of dollars.
"The purpose of our legislation is to ensure quicker access to lower-cost generic drugs for Americans. And when big PhRMA starts attacking the bill, you know for a fact that it would save consumers money by making cheaper generic drugs more available," said Vitter. "This is a great opportunity to achieve cost savings by bringing lower-priced generics to the market faster and will greatly benefit many Americans on tight budgets, as well as significant savings to the federal government."
The legislation, called the Fair and Immediate Release of Generic Drugs Act, fixes an unintended problem in the Hatch-Waxman Act -- a law that provides the framework to incentivize generic manufacturers to bring generic medications to market. A provision in that law gives the first generic company to file a challenge to a patent the exclusive right to sell a generic version of the medication for 180 days before other generic manufacturers could enter the market.
In many instances though, the "first-filer" is paid by or settles with the name brand company to delay selling the generic drug. This leaves only the expensive brand name drug on the market longer than it may otherwise be, while both the name-brand company and the generic company financially benefit. During this delay, the brand name company enjoys total market exclusivity. The generic company may enjoy a settlement payment, and also blocks other generics from coming to market because the exclusivity is "parked" by the first-filer, meaning other generic manufacturers who may successfully invalidate a patent cannot enter the market until the settling first-filer's 180-day exclusivity period ends. In the meantime, American consumers and the federal government (through Medicaid, Medicare, and other federal healthcare programs) are forced to purchase more expensive medications for longer periods of time.
The FAIR GENERxICS Act would modify the "first-filer" provision, while still maintaining the integrity of the goals of the original Hatch-Waxman legislation--innovation, competition, and affordability. Specifically, FAIR GENERxICS would allow any generic company that wins a patent challenge in district court or is not sued by the brand name company to share the 180 day market exclusivity that was originally reserved for first filers, even if the first filers never intended to challenge the patent in order to settle with the brand name drug company. This new incentive structure will end the "pay-for-delay" problem and bring less expensive generics to market sooner.