[Ip-health] Bush remarks on Hatch-Waxman reform

[Mike Palmedo]

http://www.whitehouse.gov/news/releases/2002/10/20021021-2.html


President Takes Action to Lower Prescription Drug Prices

Remarks by the President on Prescription Drugs

The Rose Garden

8:33 A.M. EDT

THE PRESIDENT: Good morning. For more than a year, the Federal Trade
Commission has investigated delays and abuses in the process of bringing
generic drugs to the market. I have reviewed the FTC findings and I am
taking immediate action to ensure that lower cost, effective generic
drugs become available to Americans without any improper delays.

By this action, we will reduce the cost of prescription drugs in America
by billions of dollars and ease a financial burden for many citizens,
especially our seniors.

I appreciate so very much the Secretary of the Department of Health and
Human Services, Tommy Thompson, for his good, steady and hard work on
this issue.

SECRETARY THOMPSON: Thank you, Mr. President.

THE PRESIDENT: I want to thank Les Crawford, who is the Deputy
Commissioner of the FDA, who so ably led this agency for the last year.
I appreciate your hard work, Les. And I'm proud also, that Mark
McClellan is with us, who is the newly confirmed FDA Commissioner. Mark
has been on my staff with the Council of Economic Advisors and he will
soon take over the FDA to work with Les to make sure the policy I'm
announcing is fully implemented.

We live in an age of miracle drugs. Millions of Americans -- and
citizens from many other lands, for that matter -- have found healing
and hope from medicines discovered and created in this country. New
drugs allow children with rheumatoid arthritis to walk and to go to
school. New drugs shrink cancerous tumors and they control the advance
of HIV, slow the progression of multiple sclerosis. In the treatment of
many diseases, major surgery has been replaced by a single pill.

And this has been a special blessing to many Americans, particularly our
seniors, who are living longer and better lives. As a nation, we are
committed to encouraging the promise of new miracle drugs in two
different ways.

First, we recognize innovators must be able to be financially rewarded
for their creativity and hard work so they will continue investing and
researching, putting new resources and talents in the creation of new
drugs. Every time we hope for a cure or a breakthrough, we're counting
on the success of a researcher and the success of a drug company.

Second, we want these breakthroughs to become affordable and widely
available. Both of these goals -- innovation and accessibility -- are
essential, both are possible. In America, one of the ways we reward
innovation is by granting a patent. If you take a risk and you make an
investment and succeed, you have the exclusive right to sell what you
invent, and you have the right to profit if you can.

A new drug can cost as much as $800 million to develop and bring to the
market. Without patent protection, few would take such a risk, few would
be willing to invest. With patent protection America's brand name drug
companies have become the greatest in the world, and health care systems
around the world depend on American innovations they could not possibly
duplicate.

Patents, of course, expire after a number of years, and this is one of
the ways we are able to make drugs more accessible. After the patent
expires, other companies are free to offer the drug in generic form at
far lower prices. Last year, the average brand name drug cost more than
$72 per prescription. The average price for generic drugs, which are
just as safe and effective as the brand name drugs, was less than $17
per prescription. Generic drugs make America health care far more
affordable.

Current federal law and regulations attempt to carefully balance the
goals of innovation and accessibility. New drugs, on average, are sold
for 11 years under patent protection, then generic versions become
available. Unfortunately, the careful balance of the law is being
undermined.

The FTC investigation discovered that some brand name drug manufacturers
may have manipulated the law to delay the approval of competing generic
drugs. When a drug patent is about to expire, one method some companies
use is to file a brand new patent based on a minor feature, such as the
color of the pill bottle or a specific combination of ingredients
unrelated to the drug's effectiveness. In this way, the brand name
company buys time through repeated delays, called automatic stays, that
freeze the status quo as the legal complexities are sorted out.

In the meantime, the lower-cost generic drug is shut out of the market.
These delays have gone on, in some cases, for 37 months or 53 months or
65 months. This is not how Congress intended the law to work. Today, I'm
taking action to close the loopholes, to promote fair competition and to
reduce the cost of prescription drugs in America.

The Food and Drug Administration is issuing a proposed rule that will
permit only one automatic stay per generic drug application. A move that
in many cases will reduce the public's wait for generic drugs by years.
Some patents will no longer be entitled to protections like the 30 month
stay, including patents on packaging and others that have little or
nothing to do with valuable innovation and drug therapy.

These steps we take today will not undermine patent protection. Instead,
we are enforcing the original intent of a good law. Our message to brand
name manufacturers is clear: you deserve the fair rewards of your
research and development; you do not have the right to keep generic
drugs off the market for frivolous reasons.

Over the next three years, about 200 drug patents are set to expire. By
cutting out delays and maneuvering, our reforms will yield cost savings
of more than $3 billion a year. Those savings will come to employer
health plans, to state Medicaid programs and to seniors when they buy
medicines on their own.

This is another important advance in the cause of bringing affordable
prescription drugs to our seniors. Already, we have cleared the way for
states to provide prescription drug coverage to more seniors with modest
means through our Medicaid Pharmacy Plus Program. We're working to
provide seniors on Medicare with drugs cards that provide discounts from
drug manufacturers on brand name drugs, like the ones available in
private health plans. And we will not rest until we've reformed and
strengthened the Medicare program itself so that a prescription drug
benefit is available to every senior in America.

The House of Representatives took strong action in passing legislation
to improve Medicare. The Senate failed to act. The challenge of health
care reform is to increase access to quality care, while we preserve the
finest health care system in the world.

I thank the good people at the FTC and the FDA for helping in this
effort and for working to make these critical drugs more affordable for
every American.

Thank you for coming.