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GAO Report on Lack of Competition for Medicare Biotech Drugs Again Underscores Need for Congress to Act, GPhA Says

Arlington, VA., March 1, 2010 - The Generic Pharmaceutical Association (GPhA) today released the following statement by GPhA President and CEO Kathleen Jaeger on the Government Accountability Office (GAO) report on Medicare Part D: Spending, Beneficiary Cost-Sharing, and Cost-Containment Efforts for High-Cost Drugs Eligible for a Specialty Tier:

“The evidence is clear. Americans, particularly older Americans, need access to affordable, life-saving biogeneric medicines sooner rather than later. The GAO report is further proof that the longer Congress waits to put biogenerics into the hands of consumers, the more costs will rise and competition and access to life-saving medicines will remain blocked.”

“Today’s GAO report makes clear that competition is needed to make lower-cost biogenerics available to all patients. The report documents that competition is needed so that health insurers can negotiate for lower-cost alternatives to high-priced specialty-tiered brand drugs -- many of which are branded biopharmaceuticals. The positive impact of biogeneric competition has been validated in many economic analyses. Estimates from these studies pin the projected savings from $42 billion on the low end to as much as $108 billion during the first 10 years of biogeneric market formation.”

“The GAO findings also underscore the fact that the current system leaves older Americans particularly exposed to the high cost of brand specialty –tiered medicines. The report states that among all beneficiaries who used at least one specialty tier-eligible drug in 2007, 55 percent reached the catastrophic coverage threshold. In contrast, only eight percent of all Part D beneficiaries who did not use a specialty tier-eligible drug reached this threshold in 2007.”

“Introducing timely biogeneric competition will produce significant savings for older Americans and the health care system in general. That’s why groups representing consumers, older Americans, business and labor have supported a workable biogenerics pathway that gets biogeneric medicines to market sooner rather than later. It’s time for Congress to get it right.”

GPhA represents the manufacturers and distributors of finished generic pharmaceuticals, manufacturers and distributors of bulk active chemicals and suppliers of other goods and services to the generic drug industry. Generics represent 74 percent of the total prescriptions dispensed in the United States but only 22 percent of all dollars spent on prescription drugs. For more information about the industry, visit www.gphaonline.org.

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