Obama’s generics plan criticised
pharmafile | February 15, 2011 | News story | Sales and Marketing | FDA, Obama, PhRMA, generics, reform
US pharma says new plans to end ‘pay-for-delay’ generics deals and shave five years from biologics exclusivity will threaten innovation and jobs.
The measures are included in President Obama’s new budget, which aims to cut the federal deficit of $1.1 trillion over a decade by cutting public spending and increasing taxes.
President Obama has called the budget a ‘downpayment’ on fiscal control, but has been attacked from both sides – by those claiming it hasn’t gone far enough, and by those claiming the austerity measures will harm the economy.
Pharma and biotech affected
Under the proposals, biologic drugs would have their market exclusivity period reduced from the current 12-year period to just seven. The 12-year period was passed into law less than a year ago, after pro-industry groups in Congress successfully argued for this. Obama has now resurrected his original goal of a seven-year period, and now cites an earlier Federal Trade Commission recommendation that 12 years was unnecessary to promote innovation and could ‘potentially harm consumers’.
The second proposal will see the end of ‘Pay-for-delay’ agreements, whereby a brand name company settles out of court with generic companies by paying the firms to delay entering the market.
The White House estimates that these changes could produce $12 billion in savings over a ten-year period. But the proposals face a tough challenge in being passed into law by a divided Congress.
PhRMA has hit out at the measures. President and chief executive John Castellani said: “While we understand the need to reduce the deficit, policies such as these represent the wrong approach. Instead, our country needs to retain and extend policies that promote the growth of private-sector R&D investment and secure our sector’s future here in America. While the US currently retains an advantage in medical innovation, it’s ours to lose.”
PhRMA claims ‘pay-for-delay’ deals often bring generics to market years before patent expiry, and says the changes could actually delay access to generics. The Federal Trade Commission report published in January 2010 made it clear, however, that the practice is anti-competitive, and resulted in patients paying more.
Castellani also condemned the proposals to cut the 12-year exclusivity period.
“The President’s proposal to reduce the 12 years of data protection – the law’s only bipartisan provision – seriously threatens innovative companies’ ability to fund research on future treatments and cures, he said. “Such a public policy flies in the face of the Administration’s recent commitments supporting domestic innovation, biomedical research, jobs and US competitiveness.”
Castellani said the reduction would see the US offering a shorter period of market exclusivity than Europe, which now gives 10 years market exclusivity for both small and large molecule drugs.
“The proposed policy could jeopardise American competitiveness since the US would then provide less data protection for new, innovative biologics than is currently bestowed in Europe,” he concluded.
The President only has the power of drawing up the budget, and needs Congress to vote in favour of it. His opponents the Republican party now control the House of Representatives after the November elections, during which they campaigned for severe cuts to federal spending.
Brett Wells
Related Content
MRM Health’s ulcerative colitis treatment receives FDA Investigational New Drug clearance
Microbial Resource Management (MRM) Health has announced that its lead programme, MH002, has received Investigational …
Complement Therapeutics’ geographic atrophy treatment receives FDA Fast Track designation
Complement Therapeutics has announced that CTx001, its gene therapy treatment for geographic atrophy (GA) secondary …
Johnson & Johnson submits robotic surgical system for De Novo classification
Johnson & Johnson has announced the submission of its Ottava Robotic Surgical System for De …
