Generic solution
THE HIGH COST OF PRESCRIPTION drugs affects not just every American who regularly takes medication but every American who regularly pays taxes. (Between the two groups, that’s just about every American, period.) So it’s baffling that the Bush administration is not making better use of one of the best savings tools available: low-cost generic drugs.
There are more than 800 generic-medication applications awaiting approval from the Food and Drug Administration -- an unprecedented backlog. The drug industry is partly to blame for exploiting regulatory loopholes to keep generics off the market. But the bigger problem is simpler. Since 2001, the number of brand-name drugs losing their patent protection has steadily increased, but the FDA hasn’t adequately boosted either staff size or efficiency to deal with the new flood of applications.
Although expanding the office to speed up reviews could cost as little as $15 million a year, according to industry estimates, the administration has underfunded the Office of Generic Drugs for several years, and the president’s latest budget includes only a nominal increase for 2007, to about $28 million.
According to FDA guidelines, it should take no longer than six months to review a generic application, yet the wait averages 20 1/2 months. That’s inexcusable. Unlike the long and detailed reviews necessary to determine the safety and efficacy of new drugs, generics need mostly to show that they’re the exact chemical equivalent of the original before they can be sold to the public.
The potential savings are huge. Americans spent nearly $250 billion on prescription drugs last year, but the price of a generic can be as little as one-fifth the price of a brand-name drug. One study estimates that wider generic drug use could have saved consumers $20 billion in 2004 alone.
The administration has announced a plan to boost FDA staffing by charging user fees to manufacturers of generics and to finally make the application process electronic. And Sens. Trent Lott (R-Miss.) and Debbie Stabenow (D-Mich.) have proposed legislation to close some patent-extending loopholes.
The Senate bill mixes good ideas with bad, and it faces considerable opposition in Congress. By whatever means, though, Washington needs to identify the generic drug delay as a serious problem, one that can be solved with a modest amount of money. Now that the feds are lavishing billions on prescription drugs under the new Medicare drug program introduced last month, you’d think that they would want to save money wherever they can. A larger dose of generic drugs is one of the few no-brainers to keep the nation’s healthcare bill from growing even larger.
