Generics Good For Most

Generic medicines and their future
OUR OPINION: Laws covering these drugs need to be updated, expanded
If you have ever saved a few dollars -- or a lot -- buying generic drugs, give thanks to a law enacted 25 years ago that made it possible. According to the Congressional Budget Office, generic drugs save consumers an estimated $8 billion to $10 billion a year at retail pharmacies. More billions are saved when hospitals use generics, according to government figures.

In 1984, two unlikely legislative allies -- Sen. Orrin Hatch, R-Utah, and Rep. Henry Waxman, D-Calif. -- got together to push this ground-breaking law through Congress. The Hatch-Waxman Act was passed back when bipartisanship was not a dirty word and signed by President Ronald Reagan.

Greater market access

A legislative compromise gave brand-name innovators extension for their patents by restoring the time lost in the approval process. In return, generic-drug companies won greater access to the market for prescription drugs, giving consumers the benefit of cheaper medicines with equivalent quality.

The law is one of the biggest pro-consumer success stories of the era that promoted greater market competition. Today, according to an industry group, there are 9,000 generic drugs approved for use in the United States. By 2011, the generic producers say, patent protection will expire for brand-name pharmaceuticals with some $60 billion in sales, opening up greater avenues for savings by U.S. consumers.

Because of these savings and the enormous deficits facing Medicare and other healthcare programs, the government should encourage greater use of affordable generic medicines in plans funded by taxpayers. The producers of generic pharmaceuticals estimate that a 1 percent increase in the use of such drugs in Medicaid alone could yield a savings of nearly $500 million per year.

Produce biogenerics

Congress has a role to play as well. It should create a program that clears the way for biologic medicines -- currently exclusive to brand-name producers -- to become biogenerics.

Used to treat AIDS, stroke, diabetes and other life-threatening diseases, biologics are produced by living organisms and tend to be expensive because of the intricate science used in research and development. Herceptin, a treatment for breast cancer, costs about $12,000 yearly, according to the biogeneric industry.

Pharmaceutical companies rightly insist that these products be protected by stronger patents than those covering an earlier generation of medicines. But consumers should not be blocked from access to these affordable, life-saving drugs forever.

The introduction of biogenerics should be an integral part of the healthcare reform debate. Surely a compromise can be forged that protects manufacturers' investment and rewards innovation yet also ensures that the public has access to biogeneric versions.