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GPhA Calls PhRMA's Authorized Generics Study "Disingenuous"

ARLINGTON, VA, April 18, 2007-- The Generic Pharmaceutical Association (GPhA) today called PhRMA’s latest study on “authorized generics” a disingenuous attempt to devalue the 180-day exclusivity period, which is an important incentive for generic pharmaceutical companies to challenge questionable patents and bring affordable medicines to market.

“When the Hatch-Waxman Act was created, Congress wisely granted a 180-day period of exclusivity to generic companies to spark competition and increase the availability of safe and affordable generics,” said GPhA President and CEO Kathleen Jaeger. “However, brand companies are increasingly deciding to circumvent Congressional intent by bringing authorized generics to market. This blatant move to cut the legs out from under Congressional intent only serves to harm consumers by stifling competition.

“No one should be fooled by PhRMA’s latest attempt to pull the wool over consumers’ eyes. Instead of focusing on what brand pharma claims its mission is -- to develop innovative drugs -- it has decided to spend its time undermining the value of the 180-day generic exclusivity provision. That’s bad for consumers any way you look at it. They know the more they devalue the 180-day generic exclusivity provision, the less of a chance generic companies will undertake questionable patent challenges in the future.

“Brand pharma is simply focused on abusing every loophole it can find in search of greater profits and to maintain a brand name drug monopoly. It’s a strategy aimed at protecting brands’ bottom lines, not consumers’ pocketbooks,” Jaeger added.

Under provisions in the Hatch-Waxman Act, the first generic company to successfully challenge a questionable brand patent, file an abbreviated new drug application (ANDA) with FDA and receive approval to market that drug product is awarded 180-day exclusivity. This 180-day period was designed to permit the generic company alone to compete with the brand company, allowing the generic to recoup costs incurred for undertaking a patent challenge. Brand companies are circumventing the Act’s intent by introducing an authorized generic -- which is the brand’s own product repackaged and marketed either through a subsidiary or third-party -- during this critical timeframe. Moreover, because the brand is selling part of its product as a generic, it is not required to go through the rigorous, abbreviated approval process required by a true generic.

Generic companies conduct their research and development years in advance of patent challenges. That’s why authorized generics, if allowed to remain unchecked by Congress, could severely curtail future patent challenges. This would allow brand companies once again to evergreen patents and substantially delay consumer access to affordable medicine.

“The incentive to challenge patents has already saved consumers tens of billions of dollars by enabling the introduction of generic competition earlier than otherwise would have been possible,” said Jaeger. “GPhA strongly urges Congress to close the authorized generic loophole and restore the careful balance achieved by the Hatch-Waxman Act. Preventing the introduction of authorized generics during the exclusivity period will ensure that consumers continue to receive timely access to safe and effective generic medicines.”

GPhA represents the manufacturers and distributors of finished generic pharmaceuticals, manufacturers and distributors of bulk active pharmaceutical chemicals, and suppliers of other goods and services to the generic drug industry. Generics represent 63% of the total prescriptions dispensed in the United States, but less than 20% of all dollars spent on prescription drugs. For more information about the industry, visit www.gphaonline.org.

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