Senate votes for speedier generic drug access

Friday, June 20, 2003

WASHINGTON -- Determined to attack the high price of drugs, the Senate voted overwhelmingly Thursday to give consumers speedier access to low-cost generic alternatives to treat illnesses ranging from allergies to arthritis.

The 94-1 vote added the provisions to far-reaching Medicare prescription drug legislation moving toward passage next week.

The changes "would eliminate the various practices some brand-name pharmaceutical and generic companies have used to delay consumers access to low-cost affordable medicines," said Sen. Judd Gregg, R-N.H., who helped negotiate a compromise after three years of struggle.

Sen. Charles Schumer, D-N.Y., estimated the changes could save consumers $60 billion to $70 billion over the next decade, and reduce Medicare costs by $18 billion to $20 billion. "What our legislation does is hasten the generic onto the market, allow it to come on to the market in its fair time," he said.

The Food and Drug Administration issued regulations last week to make it harder for brand-name companies to block generic competition, steps that President Bush estimated could save $3.5 billion a year.

But Gregg, Schumer and others said the legislation would do more.

Under the FDA rules as well as the legislation, brand name drug companies would be limited to a single 30-month delay in their effort to block approval of a generic drug. Under current law, brand-name companies are permitted to file repeated patent-infringement claims, each of which can result in a 30-month delay in FDA consideration.

Penalizing for deals

In addition, though, the legislation is designed to penalize generic drug companies from entering deals in which brand-name competitors pay them to delay bringing the lower-cost alternative to market.

While a generic drug company generally receives exclusive rights to market their alternative for 180 days after receiving FDA approval, under the legislation they would forfeit that prerogative if they entered such a deal.

Additionally, the legislation would permit generic firms to file counter claims if they're sued for patent infringement, a step that could lead to reduction or even elimination in the 30-month delay. Supporters also said that by writing these changes into law, they made it harder for critics to challenge them successfully in court.

The vote provided fresh impetus for the underlying Medicare legislation, a bill costing nearly $400 billion over the next decade that would give seniors a prescription drug benefit for the first time. The insurance would be offered by private companies, and subsidized by the government, with additional assistance for lower-income seniors.

In addition, it would offer a new managed care option for seniors under Medicare, part of an effort backed by President Bush and the Republicans to provide a dose of free-market competition to the program as well as shore up its finances.

The administration issued a formal letter of support for the measure during the day, but Republican conservatives remained restive, fearful that while the bill creates a new government benefit program long sought by Democrats, it skimped on the free-market changes the GOP seeks.

Officials released a letter that 27 GOP senators sent to Bush on Wednesday, saying they wanted the final compromise to "incorporate private sector, market-based elements, that do not rely on the inefficient Medicate price control structure."

Beyond the rhetoric, though, at a stormy closed-door meeting, Republicans demanded changes in the bill. Led by Sen. Jon Kyl, R-Ariz., that want the government's support for the new managed care Preferred Provider Organizations to be based on competitive bidding by the firms themselves, rather than the price of the government-run traditional Medicare. Some Democrats expressed concerns with the proposal, though, raising the prospect that a major change could undermine the bipartisan backing the bill enjoys.

The controversy set off a series of day-long meetings involving key lawmakers and HHS Secretary Tommy Thompson, officials said. At day's end, Majority Leader Bill Frist said he hoped for a compromise that would give Kyl and conservatives their way, but only after a delay of four or five years.

In addition to the generic drug proposal, the Senate also:

-- Agreed to let drug stores fill 90-day prescriptions for Medicare recipients. The bill had reserved that right for mail order houses. The vote was 95-0.

-- Rejected a proposal by Senate Democratic Leader Tom Daschle of South Dakota to assure that seniors purchasing drug coverage would all have roughly the same premium, regardless of where they live. The vote was 56-39 against a plan to keep all premiums within 10 percent of the national average. The vote was 56-39.

The legislation assumes an average premium of $35 a month for drug coverage, but does not place an upper limit on the monthly cost.

Seniors purchasing coverage would pay a $275 deductible annually. Plans would be expected to pay half of drug costs from $276 to $4,500, after which there would be no coverage until costs hit $5,800. Over that level insurance would pay all expenses.

Despite continued grumbling, there were fresh signs that the legislation was on track for strong passage.

Sen. Jay Rockefeller, D-W.Va., one of the bill's sharpest critics, declined to say that he would oppose it when the final roll is called next week. "You can't assume" that, he said.

The addition of the generic drug provision was a sweetener designed in part to increase the momentum behind the Medicare bill. Schumer provided some estimates of the impact. A 30-day supply of Lipitor, an anti-cholesterol drug, costs $77.73 in Rochester, N.Y., he said, while a generic prescription costs $30.32.

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