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GPhA Calls on “Super Committee” to Pursue Policies Encouraging the Use of Generic Medications

Industry Now Providing $3 Billion in Savings per Week

WASHINGTON, D.C. (SEPT. 22, 2011) – The Generic Pharmaceutical Association (GPhA) today announced that it has sent a letter to Co-Chairs Sen. Patty Murray (D-WA) and Rep. Jeb Hensarling (R-TX) and the members of the Congressional “Super Committee” currently deliberating policies to reduce the nation’s deficit and debt, outlining the enormous savings generic medications provide consumers and the U.S. health care system and urging the committee to consider approaches that remove, rather than erect, barriers to increase the system-wide use of safe and affordable generic drugs.

“We believe that incentives to increase the utilization and availability of generic drugs will provide substantial savings for both the public and private sectors and should be embraced,” said Ralph G. Neas, President and CEO of GPhA, in the letter. “Conversely, policies that reduce access to these products, such as through banning pro-competitive patent settlements, or simply shift costs to the private sector, such as federal rebate increases, are counterproductive and should be rejected.”

Neas highlighted GPhA’s recently released economic analysis of U.S. generic drug usage, developed independently by the IMS Institute for Healthcare Informatics and IMS Health, which found that the use of generic prescription drugs has yielded $931 billion in national health expenditure savings over the past 10 years, including $158 billion in savings in 2010 alone — an average of $3 billion saved every week.

“At a time when both the federal and state governments are having great difficulty affording their health care commitments, it simply makes common sense that the Super Committee should give consideration to current legislative proposals that encourage states to increase their generic drug substitution rates to become closer to the levels that the best plans serving Fortune 500 companies and the Congress achieve,” he said.

Neas also urged the Committee not to eliminate the tools needed to make generics available by pursuing policies to ban or severely derail pro-competitive patent settlements, which have demonstrably saved billions of dollars for consumers, businesses and the government.

GPhA has long maintained that the use of pro-consumer patent settlements is a vital tool in providing patients with early access to safe and affordable generic medications. Banning patent settlements would delay competition, and would cut by more than a third the number of new generics that are launched prior to brand patent expiration.

A copy of the letter can be found at www.gphaonline.org/sites/default/files/GPhA%20Supercommittee%20Letter.pdf.

GPhA represents the manufacturers and distributors of finished generic pharmaceuticals, manufacturers and distributors of bulk pharmaceutical chemicals, and suppliers of other goods and services to the generic industry. Generic pharmaceuticals fill 78 percent of the prescriptions dispensed in the U.S. but consume just 25 percent of the total drug spending. Additional information is available at gphaonline.org.

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