Yesterday, FLH Partner Brian J. Malkin was quoted in a MedPage Today article by Washington Correspondent David Pittman on a GPhA Study that also published yesterday entitled: "Savings $1 Trillion Over 10 Years: Generic Drug Savings in the U.S. (Fourth Annual Edition: 2012)". According to the Report, generic drug use has saved the U.S. health care system approximately $1.07 trillion over the past decade (2002 through 2011) with $198.8 billion in savings in 2011 alone. The GPhA Report in turn referenced a number of recent positive analyses of the generic industry, asking Congress not to change the innovator-generic incentives or restrict the use of generics, with a promise for delivering generic biologicals in the future.
Along these lines, MedPage Today attributed Malkin with the following statements:
Changing the 5-year exclusivity period for traditional small-molecule drugs or the 12-year exclusivity for biologics is unlikely, Brian Malkin, drug industry attorney and partner with Frommer Lawrence & Haug in Washington, told MedPage Today in an interview.
"It's an election year; maybe they're trying to position themselves for the future," Malkin said of Thursday's GPhA report. The savings analysis seemed to be mostly about creating awareness and generating good will for future policy decisions, he said.
For instance, seeking to dissuade a Health Affairs article in November 2011 that stated generic drug usage has increased at a rate that has discouraged the development of new drugs, the GPhA Report highlighted a recent IMS report in April 2012 that found: "...[A]though generic utilization has reached new levels, more new medicines were launched in 2011 that in any other year of the past decade ... since the implementation of Hatch-Waxman, there has been a multiple-fold increase in the innovation of new medicines." The GPhA Report observed: "By creating a fair balance between innovation of new medicines and accessibility to lower cost generic medicines, federal law has established a win-win for providers and American consumers."
The GPhA Report also discussed how the generic industry hopes to lower costs for generic biologics in the future. For instance, the Report noted that a Congressional Research Service ("CRS") study completed in 2010 demonstrated that the cost of biologics is prohibitively high, both for patients and the government. The CRS Report found the average cost for the rheumatoid arthritis treatment Enbrel® was $26,000, Herceptin® for breast cancer averaged $37,000, Humira® for Crohn's disease was more than $51,000 per year, and the annual cost for Cerezyme® to treat Gaucher's disease was $200,000. The CRS Report further noted that Medicare spent more in 2009 on just one biologic drug (Epogen®) than the entire FDA budget that year, including all food, drug, and cosmetic programs. According to the GPhA Report, the CRS concluded that spending on biologics will be unsustainable without the approval of biosimilars to "enable market competition and reduction in prices." The GPhA Report said: "The proven track record of savings for consumers using traditional generic drugs can be duplicated in the biopharmaceutical market. The approval of biosimilars will inject the competition needed in the biologic market to lower costs and provide significant savings for patients in need of these lifesaving treatments."
The GPhA Report concluded with three main topics: 1) cost containment and sustainability of health care, 2) patent settlements, and 3) funding for FDA's Office of Generic Drugs. The GPhA Report asked that policymakers develop: "Policies that encourage generic dispensing and steer clear of unwarranted restrictions on generic use can bring even greater savings to U.S. consumers, patients, health care providers and payers." Regarding settlement, it stated: "[I]t would be misguided to enforce a ban on patent litigation settlements since most new generics get to market as a result of a settlement," noting that generics are able to market their products in just 48% of cases but when factoring in settlements can bring their products to market in 76% of cases. The GPhA Report concluded with a plea for Congress to increase funding for FDA's Office of Generic Drugs and not to rely only on the new generic drug user fees that will go into effect on October 1, 2012.