Hatch-Waxman reform will benefit industry and patients – Greater Access to Affordable Pharmaceuticals Act of 2001 – Brief Article

William Nixon

In 1984, legislation sponsored by Sen. Orrin Hatch (R-Utah) and Rep. Henry Waxman (D-Calif.) revolutionized the drug industry, instituting an abbreviated approval process for generic pharmaceuticals. Since then the market share for generics has risen to nearly 44 percent of all prescriptions dispensed, and consumers have saved billions of dollars.

Unfortunately, brand companies exploiting loopholes in the legislation are taking advantage of certain provisions to extend monopolies at the expense of consumers, taxpayers, pharmacists and drug stores.

These tactics are contributing to the spiraling costs of prescription drugs. In the past 10 years, the difference in the average price between a brand and a generic has ballooned, from $:17 to $46.

With these abuses becoming more frequent, the Generic Pharmaceutical Association is asking Congress to reform Hatch-Waxman, endorsing legislation that would close loopholes and help restore the original intent of the law.

Co-sponsored by Sens. John McCain (R-Ariz.) and Charles Schumer (D-N.Y.) in the Senate and Reps. Sherrod Brown (D-Ohio) and JoAnn Emerson (R-Mo.) in the House, the Greater Access to Affordable Pharmaceuticals Act of 2001 is not an attempt to shorten the current patent life of brand drugs or to undermine intellectual property rights.

No more 30-month extensions

GAAP simply fixes the provisions of Hatch-Waxman most susceptible to abuse. Under GAAP, brand companies would no longer get a free 30-month extension on the monopoly for every patent entered in the Federal Drug Association’s Orange Book, whether that patent is frivolous or invalid. Instead, these patents could be disputed more quickly. Brand companies could seek a preliminary injunction from the courts, and would be required to certify with the FDA that its list of all relevant patents is complete and accurate.

In challenging a patent, generics manufacturers would be able to seek a declaratory judgment on any patent listed in the Orange Book. The 180-day exclusivity period granted to the first generic challenger would roll over to the next applicant in line should the first reach a patent settlement, fail to go to court, not go to market with the product, withdraw its application or is otherwise determined by the secretary of Health and Human Services to have engaged in anti-competitive practices.

Under GAAP, citizen petitions would be more closely monitored, and required to show they are factually based and not simply attempting to delay generic competition. FDA regulations on establishing bioequivalence would be incorporated into statute, reducing frivolous legal challenges and accelerating access to drugs. And finally, the Federal Trade Commission would be required to study the effectiveness of the legislation after five years, to determine whether it has increased consumer access to generics by promoting fair competition.

These provisions will go a long way toward promoting competition. Consumer groups and associations such as Rx HealthValue, Consumers Union, the National Association of Chain Drug Stores and the Seniors Coalition have endorsed GAAP. Pharmacists, physicians and consumers alike are concerned about drug costs. Generics offer a solution by saving over $1 billion for every 1 percent increase in their utilization. GAAP will help put an end to brand delay tactics and bring generics to market more quickly and efficiently. The GPhA is not asking Congress to change the rules–instead, we are calling on legislators to restore the original intent of Hatch-Waxman, giving patients greater generic drugs.

The Generic Pharmaceutical Association was formed last year through the merger of the Generic Pharmaceutical Industry Association and the National Pharmaceutical Alliance. William Nixon is the association’s first president and chief executive officer.

COPYRIGHT 2001 Reproduced with permission of the copyright holder. Further reproduction or distribution is prohibited without permission.

COPYRIGHT 2001 Gale Group

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