Bush Unveils Lite Prescription Drug Reform

by Emad Mekay

But analysts following the drug patent issue say that the move is far from adequate.

"Today, I'm taking action to close the loopholes, to promote fair competition and to reduce the cost of prescription drugs in America," Bush said, adding that the act would slash the cost of prescriptions drugs by "billions of dollars."

Drug patents in the United States expire 11 years from the introduction of a medicine on the market. Under current laws, other companies are then free to offer the drug in generic form, which almost inevitably means at far lower prices.

In 2002, 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.

U.S. pharmaceutical companies like Pfizer and Bristol-Myers Squibb dominate the world's drug production.

In an attempt to keep prices up and ward off competition, those firms have been using several legal loopholes. One of them gives companies the right to block generic drugs from the market for up to 30 months through litigation -- a so-called "30-month stay."

Bush said some companies have abused this right by pushing to delay approval of competing generic drugs for frivolous reasons.

One delaying method some companies use is to file a 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 firm buys time. Meanwhile, the lower-cost generic drug, sometimes produced in developing countries like Brazil or India, is shut out of the market. These delays have gone on, in some cases, for 65 months.

Bush said a proposed rule would permit only one automatic stay per generic drug application -- a move that could reduce the public's wait for cheaper drugs by years.

But the president, known for his corporate-friendly policies, underlined that the change will not undermine patent protection for big-name drug makers.

"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," Bush said.

"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," he said.

A new drug can cost as much as $800 million to develop and bring to the market.

Over the next three years, about 200 drug patents are set to expire in the U.S. By cutting out delays and brand-name firms' manoeuvring, the new measure would yield cost savings of more than three billion dollars a year, according to a study by the Food and Drug Administration (FDA).

An activist who has followed the issue for years says that although more details have to be released about the plan, it appears to be a positive step forward.

"Every incremental step is good," said Robert Weissman, co-director of Essential Action. "The drug-name companies have so many tools they use to block the introduction of generics. Just going after one or two may have some very marginal benefits but (it is) not sufficient to stop the abuse by the patent system."

Many generic drugs companies do not introduce drugs into the developing countries if they cannot first release them in the United States, the world's most profitable market, he added.

Democrats say the move is a Republican political ploy in the run-up to Nov. 5 congressional elections. They say the Bush plan goes too easy on big drug makers, and they favor a Senate bill designed to make drugs more affordable, partly by getting generics to the market faster.

Although foreign policy issues have dominated the election campaign, the economy is becoming an increasingly bitter battleground, with the drugs issue at the forefront.

The Generic Pharmaceutical Association (GPhA) said Bush's move is welcome but should be written into law to make it stronger.

According to the association, generics represent 45 percent of all prescriptions dispensed in the United States, but less than 10 percent of all dollars spent on prescription drugs.