Spitzer Supports Legislation To Allow More Sales Of Affordable Generic Drugs

New York State Attorney General Spitzer today expressed his strong support for pending federal legislation that would expand the availability of low-cost, effective generic medications.

In a letter to Sen. Edward Kennedy (D - Mass.) and Sen. Judd Gregg (R-N.H.), the Chairperson and ranking minority member of the Senate Committee of Health, Education, Welfare and Pensions, Spitzer expressed strong support for the Greater Access to Affordable Pharmaceuticals Act ("GAAP"). GAAP is sponsored by Senators Charles Schumer (D.-N.Y.) and John McCain (R.- Ariz.), and is currently pending before the full Senate.

"Prompt passage of this legislation will help increase consumers' access to quality health care at affordable prices," said Spitzer. "By passing GAAP, Congress can protect consumers, lower drug prices and avoid the need for time-consuming litigation."

GAAP would amend the Hatch-Waxman Act of 1984 (the "HWA"), which governs the process by which generic drug manufacturers obtain approval to sell more affordable alternatives to brand-name pharmaceuticals. Generic drugs are bioequivalents of brand-name drugs in dosage, form, safety, strength, route of administration, quality, performance characteristics and intended use. They tend, however, to be significantly less expensive than their brand-name equivalents.

While Hatch-Waxman sought to expand generic entry, brand-name manufacturers have exploited loopholes in its provisions to keep out generic competitors, and to maintain monopoly profits long beyond the appropriate date for the termination of patent protection, at consumers' expense.

Under Spitzer, the New York Attorney General's Office has brought three antitrust suits, in conjunction with other state attorneys general, challenging instances in which drug companies used provisions of the HWA to exclude potential competitors from marketing generic alternatives. The lawsuits also seek compensation for consumers who were denied the savings associated with generic alternatives to the heart medication Cardizem CD?, the anti-cancer drug Taxol?, and the anti-anxiety medication Buspar?.

The letter, and a more detailed policy statement that accompanied it, illustrate the flaws of the Hatch-Waxman Act and explain how the proposed legislation would better protect consumers' access to more affordable pharmaceutical alternatives. Specifically, GAAP would help eliminate the root of the anti-competitive conduct underlying the states' lawsuits by reducing the ability of brand-name manufacturers to obtain an automatic thirty month bar on generic entry merely by filing a patent with the United States Food and Drug Administration. Additionally, the proposed legislation would end the practice by which brand-name manufacturers pay potential generic competitors to stay out of the market while continuing to exclude other generic entrants, another practice challenged in the pending lawsuits. Such agreements can create a perpetual roadblock to generic entry.

In addition to pointing out loopholes in the statute that have impeded market access to some generic drugs, Spitzer wrote that GAAP will be an important step in correcting these problems, and in ensuring consumers access to affordable medication." He commended Senators Schumer and McCain for their work, and urged "speedy passage of this important and beneficial bill."

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