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Q&A on Bringing Generic Rx to Market

Senator Charles Grassley
Senator Charles Grassley

From Sen. Charles Grassley –

Q: How will a recent Supreme Court decision impact prescription drug costs?
A: With a 5-3 ruling in June, the U.S. Supreme Court helped speed up opportunities for cheaper drugs for patients currently stocking their medicine cabinets with costly, brand-name prescription drugs. At issue are financial settlements, called “pay for delay,” between brand-name and generic drug makers that effectively postpone the time in which a generic Rx copy can hit the market. Here’s how it works: a pharmaceutical manufacturer pays off a generic drug company to settle patent litigation in exchange for delaying entry of the generic version of the brand-name drug into the market. This anti-consumer practice only serves to extend the time before patients can purchase cheaper generic drugs. If the average delay is 17 months and a consumer is paying an 85 percent mark-up on a monthly $250 prescription, that monthly mark-up adds up big time. The high court’s ruling sends a strong signal that these back room deals are indeed subject to the nation’s anti-trust laws. That’s good news for consumers and the taxpaying public. These settlements turn the free enterprise system on its head and do not square with America’s anti-trust laws. According to numbers cited by the Federal Trade Commission (FTC), U.S. pharmaceutical sales surpassed $320 billion in 2011. The FTC also points out that when a generic version of a brand-name drug enters the market, the price dramatically decreases to about 15 percent of the original price tag. Talk about a dramatic price swing. Such a huge fluctuation adds up to sizable savings for patients and for taxpayers subsidizing government health care programs for the elderly, disabled and veterans.

Q: What more can be done to get more affordable generic drugs to reach the pharmacy shelves sooner rather than later?

A: As the ranking Republican on the Senate Judiciary Committee, which has legislative authority over the nation’s anti-trust laws, I have called into question market-distorting practices across the economic spectrum, from vertical integration in the livestock industry, to OPEC’s manipulation of the supply and demand of oil, and the drug industry’s quest to keep the price of drugs on the pharmacy shelf high for as long as possible. The Supreme Court has taken a good first step towards ending this anti-competitive behavior. However, a legislative remedy making these settlements presumptively unlawful would make an even bigger impact on consumers’ pocketbooks. I’ve introduced legislation with Senator Amy Klobuchar of Minnesota to help put an end to these pay-for-delay settlements that hurt the consumer and the taxpayer. Our bipartisan reform is one I’ve pushed for many years on behalf of consumers. According to the Congressional Budget Office, our legislation would accelerate the availability of lower-priced generic drugs, generating more than $4.7 billion in taxpayer savings over 10 years. Instead of funneling untold millions of dollars into twisted litigation settlements which keep costs high for the American people, the pharmaceutical industry should channel those dollars towards research and development for the next innovative cure. Pay-for-delay deals distort the market, force consumers to pay more for their medicines, and add an exorbitant burden to the deficit. Considering the taxpaying public pays for one-third of prescription drug spending in the United States, it’s time for the drug companies to swallow a dose of marketplace fairness. Pay-for-delay does more harm than good.

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@Iberra-were you born stupid or do you have to work at it? Katie is absolutely correct. It is well known by people who use a lot of prescription medicine that some generics are not as potent as the original. You need to get your facts straight before you post stupid comments.

I have found that some generic drugs do not work as well as the brand name drugs. This is true for me (and others) with hormone replacement therapy and ibuprophen. I can no longer take ibuprophen, but when I did, I always bought brand name Advil or Motrin because it worked better and lasted an hour or two longer than the generics. My doctor had to double the dose of a drug I take for headache pain when the generic came out to get the same results as I got with the brand name drug. I also just read where Wellbutrin 300mg XL plain doesn’t work and the FDA did not make them test that strength. They tested the 150mg XL and it worked, so they assumed the 300mg XL would also work, but it doesn’t. So now they are having to figure out why this happens, reformulate it, retest it, and hope they can get the higher dose to work. It’s a shame that the brand name drugs do not get less expensive when the generics become available. You would think the competition would bring down their price as well, but it usually goes even higher.

More mis-information from Katie. Generics are no different if formulated to be the same way. Comparing off the shelf aspirin is false and inaccurate.

Just stop commenting katie. You hurt, not help society.

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