AAM Calls for Lower Health Care Costs, Faster Generic Drug Approvals
ROCKVILLE, MD, Sept. 17, 2010 - The Alliance for Affordable Medicine (AAM, formerly known as the Coalition for a Competitive Pharmaceutical Market) today urged the FDA to implement a user fee program for generic drugs.
The Food and Drug Administration (FDA) held a public hearing today on the possible development of a generic drug user fee program. AAM Chairman Jonah Houts said generic user fees should be used as a way to bring safe, low-cost generic drugs to market sooner, provided they supplement, and not supplant, federal funding. "The Alliance supports creating robust competition through the market entry of generic drugs, and a generic drug user fee will go a long way toward ensuring that happens," Houts said at the hearing.
The FDA currently has a backlog of about 1,900 pending generic drug applications, and approval times for each is about 26 months, Houts said - a full 20 months longer than the six-month review period in place under current regulations. But generic user fees would help provide FDA with the funds necessary to examine new applications and reduce the backlog, Houts said. "The consequences of this backlog are quite real for purchasers and patients," Houts said. "The Alliance is concerned that this situation will worsen over the next five years as patents expire on brand-name drugs totaling more than $100 billion in annual sales, resulting in a surge in submissions of generic drug applications."
AAM's commitment to health care savings were further validated earlier this week when a Congressional Budget Office (CBO) study shed light on the immense savings generic drugs provide in the Medicare Part D program. In "Effects of Using Generic Drugs on Medicare's Prescription Drug Spending," the CBO found that Medicare's prescription drug costs under Part D in 2007 were reduced by $33 billion thanks to utilization of generic drugs. The study went on to note that generic versions of brand-name biologic drugs will have important implications for the cost of drug spending in the future.
"This study is just the latest example of the enormous savings potential brought to us by generics," Houts said. "Further utilization of generics, be they chemical-based or biologic, will lead to billions more in savings for consumers, businesses, and private and public health plans in the years to come. With that in mind, we must remove any and all barriers to the timely approval of safe, high quality generic prescription drugs - including the inadequate funding of OGD," stressed Houts.
AAM brings together large employers, consumer groups, prescription drug manufacturers, pharmacies, pharmacy benefit managers and plan sponsors who are committed to policies that expand access to safe, life-saving, and affordable medicines that result in cost savings for patients and the health care system. The Alliance includes purchasers of pharmacy benefits for more than 250 million Americans.