Prescription for Affordable Health Care ANNUAL REPORT 2007

Transcription

GENERIC PHARMACEUTICAL ASSOCIATION
Generics: Prescription for Affordable Health Care
ANNUAL REPORT 2007
ii
We are the people who
help to make health care
affordable.
TABLE OF CONTENTS
3 Letter From the
Chairman
5 Questions and
Answers With
GPhA’s President
and CEO
11 Industry Overview
24 Key Industry
Financials
26 Board of Directors,
Committees and
Task Forces
28 Staff
Every day, millions of Americans depend
on our safe, effective and affordable
prescription medicines to feel better and
live longer and more productive lives.
Whether it’s a migraine headache, high
cholesterol or heart disease—we improve
lives for less. That’s because generic
medicines provide the same medicine
and the same results as the brands, but
at a significantly lower cost.
Above all, we ensure that a greater
number of Americans will have access to
medicines that they need and can afford.
We work hard to put affordable health
care within their reach.
Generics: prescription for
affordable health care.
G E N E R I C S : P R E S C R I P T I O N F O R A F F O R D A B L E H E A LT H C A R E
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LETTER FROM THE CHAIRMAN
According to a 2006 study by U.S. government economists, generic drugs were the
most important factor in slowing health care spending. GPhA and its member companies are committed to the continued growth of our industry as it becomes even
more evident that generics are a key solution to controlling health care costs. We
are also committed to our industry’s expansion into biogenerics, an
arena where additional billions of dollars in savings will more dramatically improve the lives of consumers. We are doing this by focusing
on achieving strategic results in the legislative, regulatory and communications arenas.
In 2006, generic utilization rates continued to climb; we saw an
increase in federal and state health care programs actively promotBRUCE DOWNEY
GPhA Chairman of
the Board
ing the use of generics; and lawmakers introduced legislation that would eliminate
remaining barriers that delay the timely introduction of affordable medicines.
The power shift within the halls of Congress presents us with a unique opportunity in
2007 to build on the momentum we experienced in 2006. Last year we saw a number
of pieces of pro-generic legislation introduced and lawmakers took a closer look at
issues such as authorized generics and citizen petitions that delay generic launches.
We also witnessed what I believe may be a significant first step in the effort to bring
biogenerics to U.S. consumers with the introduction of the Access to Life-Saving
Medicine Act. Not since the Hatch-Waxman Act have we been presented with such a
pro-generic environment.
In 2007, we have the potential to continue to reshape American health care. The GPhA
staff has been working hard, in cooperation with our member companies, to ensure
that we maximize legislative opportunities for reducing remaining barriers to the timely
approval of traditional generics, while supporting efforts that may open the floodgates
to consumer savings from biogenerics. 2007 will be a busy year for all of us.
I’d like to thank GPhA’s Board of Directors, committee participants, member companies
and GPhA’s dedicated staff for their tremendous efforts and commitment on behalf of
the industry. I believe that we have the right products, the right message, and the right
staff to create a year of enhanced opportunities for consumers and for our industry.
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QUESTIONS AND ANSWERS WITH GPHA’S
PRESIDENT AND CEO
GPhA’s core purpose is to improve the lives of consumers by ensuring timely access
to affordable pharmaceuticals. Toward this end, GPhA advances the interests of its
members through initiatives in scientific, regulatory, federal and state forums and
in the public affairs arena.
GPhA President and CEO Kathleen Jaeger reflects on the association’s accomplishments in 2006 and looks ahead to the issues that will be shaping the industry in
the future.
KATHLEEN JAEGER
President and CEO,
GPhA
2006: The Year in Review
◗ As the generic pharmaceutical industry’s representative organization before
Congress, what were the legislative highlights of 2006?
We made great progress in 2006 with delivering the message to Congress that generics
are a key part of our country’s prescription for affordable health care. For the first time
in a long while, we saw the introduction of several significant pieces of legislation to
make it easier to bring affordable generics to consumers.
A truly groundbreaking bill was introduced in Congress and will be an issue of great
discussion in 2007—the Access to Life-Saving Medicine Act, which would establish
a clear, efficient, abbreviated Food and Drug Administration (FDA) approval pathway
for biogenerics. Biopharmaceuticals are everyday medicines used to treat conditions
like cancer, heart disease, and arthritis. Unfortunately, their costs can be as much
as $200,000 per patient per year, putting them out of reach for countless Americans.
Biogenerics would bring safe and effective life-saving medicines to patients, but at a
much lower cost. The introduction of this legislation was an important step in making
biogenerics more accessible for all Americans.
Lawmakers also began looking seriously at brand company tactics, including authorized generics and citizen petitions, which are blocking generics from reaching consumers in a timely manner.
Authorized generics are increasingly being used by brand companies to discourage
generic competition, as these are brand products that only appear on the market during
the 180-day exclusivity period awarded to the first generic to gain FDA approval. One
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bill that was introduced in 2006 by Senator John Rockefeller and Congresswoman Jo
Ann Emerson would block authorized generics from entering the market during the
180-day exclusivity period. The goal of this legislation was to ensure that there would
be a strong incentive for generic companies to undertake the research and legal challenges required to bring affordable medicines to consumers.
Congress also took a notable step toward deterring authorized generics by approving
the Deficit Reduction Act, which became law in February 2006. Under a Medicaid provision in this law, brand pharmaceutical companies are required to include authorized
generics in the “best price” calculation that they provide to the Centers for Medicare
and Medicaid Services. We supported the provision to ensure equity and fairness in
the system.
Another bill, introduced by Senators Debbie Stabenow and Trent Lott, was targeted at
reforming the citizen petition process. All too often, citizen petitions aren’t filed with
the FDA by average Americans, but by brand pharmaceutical companies and their
lawyers who are trying to delay generic competition. The Stabenow-Lott bill agreed
with GPhA’s position that citizen petitions should not become “anti-citizen” petitions
by keeping generics from getting to consumers in a timely manner.
In addition, GPhA encouraged Congress to provide additional funding for the FDA’s
Office of Generic Drugs (OGD) to assist the agency in dealing with its increased workload and growing number of generic applications. Although the House and Senate
approved $5 million and $10 million, respectively, for OGD, Congress adjourned
without approving a final budget for Fiscal Year 2007. It now appears that OGD will
receive additional money under a “continuing resolution” to fund government agencies in 2007, but we’ll continue to promote more funding for OGD this year.
While we played a lot of offense on key issues in 2006, we also had to play some
defense. Our industry successfully delayed attempts to change the patent system
in ways that ultimately would have been detrimental to consumers and the generic
industry. We fought against onerous provisions that would have increased the length
of patent monopolies on expensive brand drugs by eliminating several critical defenses
to patent infringement. These provisions would have made it more difficult for our
industry to challenge faulty brand patents and allow brand companies to prop up weak
and suspect drug patents. Unfortunately, the battle isn’t over yet. It’s an issue that the
brand industry is already pushing in 2007, and we’re ready for the challenge.
Similarly, we worked long and hard with a coalition of large employers, health care
providers, generic manufacturers, and trade associations to successfully convince
lawmakers that lengthy patent extensions and other harmful measures to needlessly
extend the monopolies of everyday brand medicines had no role in a biodefense bill.
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Our efforts resulted in a biodefense bill that maintains balance within the pharmaceutical sector between brand innovation and access to generics by not creating additional
artificial barriers to generic market entry.
Clearly, 2006 was a good year for our industry as well as for consumers. As 2007 gets
underway, Congress already is taking a closer look at generics as a solution to keeping
health care costs under control without compromising care. That’s good news for our
industry and, most of all, good news for consumers.
◗ State governments also are concerned about getting their health care costs under
control. Has GPhA been reaching out to governors and state legislatures, too?
Across the nation, state legislatures are enacting laws to encourage the use of generic
medicines and rejecting measures that would increase health care costs. In Tennessee
and Ohio, lawmakers decided not to “carve out” mental health brand prescription
drugs from their formulary lists, saving the states millions of dollars. In Pennsylvania,
lawmakers repealed an unfair payment penalty that was imposed on generic pharmaceutical manufacturers. And in California, the governor agreed to include a generic
education component in his state’s prescription drug plan.
In state capitols across the country, we’re definitely seeing a move toward legislation
that will rein in health care spending. We anticipate seeing more state legislatures
and governors talking about increasing access to generics in 2007.
◗ Are consumers turning to generics as a prescription for affordable health care?
Absolutely. Today, more than 60% of all prescriptions dispensed in the United States
are generics. At the same time, nearly 60% of Medicare Part D prescriptions dispensed
are affordable generics, saving the Medicare program more than $8 billion. Increasingly, patients are asking their doctors and pharmacists if generics are available for
their prescriptions.
◗ FDA plays a critical role in bringing generic medicines to consumers, but it is
plagued by a persistent backlog of generic applications. Is there any progress being
made on this front?
The backlog of applications at FDA is frustrating to everyone—consumers, our industry
and FDA reviewers themselves. In 2006, we worked successfully with the FDA to help
move the process forward. Collaborations such as improving the electronic submission
of abbreviated new drug applications (ANDAs) and structured product labeling procedures should facilitate the review process. We also co-hosted informative workshops
and our annual Fall Technical Conference, as well as follow-up meetings in Rockville,
Maryland, and New Brunswick, New Jersey, to share information and ideas on how to
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achieve what should be our shared goal—ensuring Americans have
access to safe and effective medicines.
In 2006, more than $22 billion in brand products came off patent,
which led to an increase in ANDAs (793, according to OGD) and a
backlog in the review of those applications. To help address the
backlog, OGD implemented a Generics First Review policy. Under
the policy, generic applications will continue to be reviewed under
a “first in, first reviewed” basis, but OGD may choose to expedite
reviews under certain circumstances. This ensures that at least
one generic will be available to consumers upon expiration of a
brand patent.
We’ve also been working with FDA on instituting a “green lane” to
move active pharmaceutical ingredients from pre-established trade
channels more quickly through the customs process. The green lane
will help generic companies, as well as brands, cut through the red
tape that often delays imported ingredients from reaching domestic
manufacturing sites in a timely manner.
2007 could truly be a
watershed year for the
generic drug industry and
for consumers looking for
affordable, life-improving
and life-saving generic
medicines. It’s a year
when we’re seeing major
pieces of legislation up for
reauthorization and new,
groundbreaking pieces of
legislation like the Access
to Life-Saving Medicine
Act gaining momentum.
A LOOK AHEAD TO 2007
◗ What’s the outlook for the generic drug industry in 2007?
2007 could truly be a watershed year for the generic drug industry
and for consumers looking for affordable, life-improving and lifesaving generic medicines. It’s a year when we’re seeing major
pieces of legislation up for reauthorization and new, groundbreaking pieces of legislation like the Access to Life-Saving Medicine Act
gaining momentum.
Thanks to the introduction of the Access to Life-Saving Medicine Act,
the issue of biogenerics is now front and center. And it has been
generating a great deal of debate.
This legislation will help bring safe, effective and affordable biogenerics to consumers—an option that’s currently unavailable to
patients facing critical medical conditions. Biogenerics would bring
competition to the marketplace—making these medicines a valuable prescription for affordable health care.
While we hope Congress will move swiftly to enact the Access to
Life-Saving Medicine Act, it must also reauthorize several bills that
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will expire this year. Those include the Prescription Drug User Fee Act (PDUFA), the
Best Pharmaceuticals for Children Act, the Pediatric Research Equity Act, and Trade
Promotion Authority.
PDUFA has already sparked debate with the inclusion of generic industry user fees in
President Bush’s Fiscal Year 2008 budget. GPhA is open to talking about any options
that would bring more affordable medicines to consumers faster, but user fees by
themselves aren’t the answer. FDA says they’ll use the fees to hire more reviewers.
But hiring reviewers does not equal getting generics to consumers faster as long as
barriers like authorized generics, citizen petitions and the absence of an abbreviated
approval pathway for biogenerics keep generics from coming to market.
As for pediatric research, we strongly support the need to address the glaring lack
of clinical information on the safe and effective use of drugs in children. We certainly
want to ensure greater access to medicines for children. However, as Congress considers reauthorizing the incentives for companies to undertake pediatric research, it
needs to determine whether the American health care system is receiving the best
clinical research and information in return for an additional six months of exclusivity
for the entire family line of the product studied.
Finally, Congress will need to reauthorize Trade Promotion Authority this year. Unfortunately, pharmaceutical provisions in U.S. free trade agreements can be interpreted
to go beyond U.S. law by providing more intellectual property rights to the brand
industry in such areas as patent extensions and market exclusivity than is provided in
U.S. law. Just as bad, these free trade agreements do not include mandatory generic
access provisions found in U.S. law. The agreements can harm consumers by delaying access to generics. It’s time for Congress to put consumers back on the playing
field by requiring the U.S. Trade Representative to maintain a balance between pharmaceutical innovation and access to affordable medicines from the start of its trade
negotiations.
On the regulatory side, we’re working with a coalition of manufacturers, wholesalers,
distributors, pharmacies and their respective trade associations who are concerned
about the implementation of the Deficit Reduction Act, which made changes to the
Medicaid program. In particular, we want to ensure that any new reimbursement
model will include fair and reasonable reimbursement to pharmacists and will continue to encourage increased generic utilization. These are critical issues for the entire
industry supply chain.
2007 is already a busy year, and it’s not likely to slow down any time soon.
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INDUSTRY OVERVIEW
We are the people behind
more than 1 billion
prescriptions dispensed
each year.
From antibiotics to injectables, the generic industry’s tens of
thousands of dedicated employees in the United States and abroad
Unbranded generics account
for 54% of all prescriptions
dispensed in the United States,
yet only 10% of dollars spent
on all prescriptions.
ensure our products will help millions of people worldwide live
healthier lives for less.
In 2006, more than 510 applications for generic medicines were
approved by the FDA, leaving more than 1,000 generic applications pending review. The number of submissions is expected to
continue rising at a steady pace as more than $100 billion in blockbuster brand products come off patent during the next few years.
And, at prices up to 80% lower than brands, more generics mean
more savings for consumers and the health care system.
The benefits aren’t simply limited to savings. Studies have shown
that when patients use generic medicines, they are more likely to
keep using the medicines to effectively manage their conditions.*
That’s because generics are more affordable than brands, meaning
patients aren’t forced to make tough choices, such as deciding
whether to spend less on food, heat or other necessities to pay
for their health care needs. Moreover, patients who maintain their
treatments are less likely to be hospitalized for their conditions.
* Shrank, William H., et al., “The Implications of Choice: Prescribing Generic or Preferred Pharmaceuticals Improves Medication Adherence for Chronic Conditions,”
American Medical Association, February 13, 2006.
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We are the people who make
health care dollars go even further.
For more than 20 years, generic medicines have provided tremendous cost savings
to the health care system. That’s why a wide variety of groups—from employers and
consumer groups to health insurers, doctors and pharmacists—are encouraging the
use of generics as a great way to obtain the same medicine and the same results
as the brand, but at a significantly lower price. They understand the benefits that
generics provide.
It’s clear that generic use has made a difference in federal health care programs. Since
the inception of the Medicare Prescription Drug Benefit, the Centers for Medicare and
Medicaid Services has strongly encouraged Part D beneficiaries to use generic medicines. And they’ve listened. Today, nearly 60% of all Medicare Part D prescriptions
dispensed are affordable generics. As a result, the Medicare prescription drug benefit
program realized more than $8 billion in savings, and premiums for the average individual are about a third less than previously estimated, at $25 per month, according to
the Department of Health and Human Services.
States realized millions of dollars in savings through generics in their Medicaid programs as well. States such as Minnesota, which requires pharmacists to dispense a
generic whenever one is available, and Idaho, which requires prior authorization from
the state Medicaid agency to dispense certain brands, have dramatically reduced
their program costs.* Given the significant potential for savings, the trend of enacting
provisions to encourage generic utilization is likely to continue across the nation.
Consumers have benefited, too. In 2006, a number of pharmacies and insurers promoted generics as a way for consumers to save money. In September, Wal-Mart began
a program offering a variety of generics for only $4. Other retailers, including Giant
Eagle, Target and Meijer, followed suit, offering similar incentives to their customers.
At the same time, health insurers like CareFirst BlueChoice offered coupons and other
promotions that encouraged consumers to ask their doctors and pharmacists whether
a generic is available for their prescriptions.
With billions of dollars in savings, it’s not hard to add up the reasons why generics are
the right prescription for affordable health care.
* Centers for Medicare and Medicaid Services, http://www.cms.hhs.gov/smdl/downloads/Rvacutecare.pdf,
accessed January 29, 2007.
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We are the people who will keep
health care affordable in the future.
The good news is that medical and scientific advances are making it possible for
Americans to live healthier, longer lives. That’s why it’s important to make sure
that we can stretch our finite health care dollars even further. It means that we
need to work with Congress and state legislatures to address critical issues that
are jeopardizing consumer access to generic medicines.
BIOGENERICS
Biopharmaceuticals are everyday medicines derived from living cells and proteins used
to treat conditions like heart disease, rheumatoid arthritis, and cancer. Today, the U.S.
market for these products stands at $35 billion and is growing at an annual rate of 17%.*
These products account for 12% of total pharmaceuticals, and with more products being
developed, that number will continue to skyrocket. Unfortunately, these products are
exceedingly expensive, with costs as high as $200,000 per patient per year. These costs
are out of reach for most Americans, even those with health insurance.
That’s why members of Congress have introduced the Access to Life-Saving Medicine Act to bring more affordable biogenerics to consumers. The legislation would
mandate that FDA create a clear, efficient abbreviated approval pathway under the
Public Health Service Act for these life-saving medicines. It also would provide FDA
with the authority to use sound science to make decisions.
Under the legislation, the science would drive the process, allowing FDA to review
applications for biogenerics and to decide when and if additional tests are needed
to show that the medicine has the same efficacy and safety profile as the innovator biopharmaceutical. Over the past 20 years, there have been numerous scientific
advances that have allowed biopharmaceuticals to be well-characterized. These scientific advancements have greatly improved the knowledge of these agents and allowed
FDA to perform complete and sophisticated scientific assessments of their structure
and function. These tools are used today by brand firms and FDA to permit changes
to products after approval. As a result of these technologies, brand firms typically do
not have to repeat clinical studies. These same advanced tools can be used by FDA to
determine whether to approve more affordable biogenerics.
*Long, Doug. “U.S. Pharmaceutical Market: Trends, Issues, Forecast,” IMS Health presentation at the
NACDS “Biopharmaceuticals in Quality Care” conference, October 19, 2006.
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The large array of sophisticated analytical tools used to examine biopharmaceuticals
has been validated and embraced by experts in the scientific community. Modern
tools allowing the analysis of the purity and structural integrity of large, complex biomolecules can be used to effectively show that biogenerics of low to modest complexity are as pure and biologically active as the founder products.
With the science being able to demonstrate the safety and effectiveness of a vast array
of biogenerics, demand for these affordable medicines is growing. A diverse group of
organizations representing tens of millions of older Americans, workers, businesses
and representatives of the health care community all believe that biogenerics will
bring competition into the health care system, reduce costs and increase access to
often life-saving care. In a letter to Congress, AARP, the AFL-CIO and the Coalition for
a Competitive Pharmaceutical Market joined together and wrote, “It is critical that the
exciting innovation in the biotech industry be balanced with opportunities to increase
competition and drive down costs, which will result in greater access to those medications.” GPhA agrees—consumers need access to those life-saving medicines today,
and it’s time for Congress and the FDA to act.
AUTHORIZED GENERICS
When the Hatch-Waxman Act was passed in 1984, Congress wisely granted a 180day period of exclusivity to generic companies to spark competition and ensure that
checks and balances were built into the drug development system. Unfortunately,
brand pharmaceutical companies are circumventing Congressional intent by using
tactics like authorized generics to keep generic companies from bringing their safe,
effective and affordable medicines to consumers by discouraging generic companies
from challenging questionable brand patents.
Under provisions in the Hatch-Waxman Act, the first generic company to successfully challenge a questionable brand patent and receive approval to market that drug
product is awarded 180-day exclusivity. This 180-day period was designed to permit
the generic company alone to compete with the brand company, allowing the generic
firm to recoup costs incurred for undertaking a patent challenge. Brand companies
are circumventing the Act’s intent by introducing an authorized generic—which is the
brand’s own product repackaged and marketed either through a subsidiary or thirdparty—during this critical timeframe. Moreover, because the brand is selling part of
its product as a generic, it is not required to go through the rigorous, abbreviated
approval process required of a true generic.
In 2006, members of Congress, including Congresswoman Jo Ann Emerson and Senator
John Rockefeller, recognized the importance of this incentive and introduced legislation to block authorized generics from being marketed during the 180-day exclusivity
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period. This legislation, The Fair Prescription Drug Competition Act,
was reintroduced in January 2007.
MEDICAID/DEFICIT REDUCTION ACT
IMPLEMENTATION
The Centers for Medicare and Medicaid Services (CMS) is working
on rules implementing provisions of the Deficit Reduction Act of
2005 pertaining to payment for prescription drugs under the Medicaid program. The provisions, among others, include changes to the
determination of average manufacturer price and best price.
As CMS moves forward with these rules, which are set to go into
effect in July, GPhA and a coalition of distributors, pharmacies, and
their respective trade associations will be working together on
efforts to ensure that the rules do not adversely affect the pharmacy
reimbursement model and consumers’ access to generics. While
GPhA and its coalition partners share the goal of ensuring that CMS
and the states have consistent data, rule changes must not undercut competition in the marketplace. When competition is reduced,
costs to consumers increase and patient access to affordable generics is jeopardized.
PATENT SETTLEMENTS
The Hatch-Waxman Act of 1984 allowed the resolution of patent
disputes prior to the expiration of questionable patents in order
to accelerate consumer access to affordable medicines. Over the
past 20 years, successful patent challenges that were either won
In a letter to Congress,
AARP, the AFL-CIO and the
Coalition for a Competitive
Pharmaceutical Market
joined together and
wrote, “It is critical that
the exciting innovation
in the biotech industry
be balanced with
opportunities to increase
competition and drive
down costs, which will
result in greater access to
those medications.”
or settled by early entry have generated tens of billions of dollars
in savings for American consumers. That’s why GPhA is concerned
about proposed legislation that would restrict settlement options—
in particular, an option known as reverse consideration, which
involves the exchange of anything of value.
Under current law, parties to any litigation have the right to consider
a variety of options for settlement. This flexibility not only conserves
judicial resources, it also allows generic and brand manufacturers
alike to negotiate the risks involved in patent litigation, with the
knowledge that a settlement may become the best option.
Absent a settlement, patent litigation is an all or nothing proposition.
Taking a complex patent challenge all the way to a court decision
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necessarily means that the generic company risks being kept off the market entirely
until patent expiration, which would ultimately harm the consumer. Limiting a generic
company’s ability to settle patent disputes would lead to fewer patent challenges and,
in the end, delay market entry with a substantial loss in savings for consumers.
Moreover, Congress already has established an effective system to ensure federal
review of patent settlements through revisions to the Hatch-Waxman Act that were
included in the Medicare Modernization Act of 2003. Under that law, settlement agreements between generic and brand companies must be filed with the Federal Trade
Commission (FTC) and the Department of Justice. FTC reviews each agreement and
can propose amendments or challenge settlements.
GPhA is committed to working with Congress to address obstacles to market entry
for generics, but a broad ban on patent settlements with reverse consideration could
actually have the opposite effect. GPhA strongly believes that Congress should not
inadvertently sweep good settlements in with the bad ones. A case-by-case approach
that protects consumers by evaluating the market implications of a particular settlement is critical.
PATENT REFORM
Strengthening and improving the patent system is a laudable goal, but Congress
needs to examine whether what appear to be simple changes could have the unintended consequences of weakening the U.S. patent system and delaying consumer
access to affordable medicines.
In particular, GPhA is concerned about several patent reform provisions under consideration in Congress. One would increase the length of patent monopolies on expensive brand drugs by eliminating several defenses to patent infringement currently
available to those challenging faulty patents. Another provision would allow brand
companies to prop up weak and suspect drug patents by making it more difficult to
prove invalidity. And a third would create an incentive for companies to act dishonestly before the Patent and Trademark Office by eliminating inequitable conduct as
an independent defense to patent infringement.
GPhA also wants to ensure that the “best mode” requirement, under which the
inventor must disclose in the patent application the most efficient method known for
producing the invention, is not eliminated. Elimination of this requirement would
give the inventor a further monopoly, as the public would have to spend time reinventing the best way to make the product after the patent has expired.
Ultimately, consumers should benefit from patent reform, not pay the price. Congress
needs to closely examine legislation to ensure that it does not inadvertently increase
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health care costs by making certain changes to the Patent Act and
hindering access to safe, effective and affordable generic drugs.
FREE TRADE AGREEMENTS
The protection of intellectual property rights as they relate to pharmaceuticals is a critical aspect of the United States’ free trade negotiations. The United States has built a strong health care system by
fostering a balance between pharmaceutical innovation and access
to affordable medicines. It is essential that U.S. free trade agreements (FTAs) reflect this balance. Failure to do so will hinder market
access, strain the health care system and restrict the availability of
affordable medicines worldwide.
Unfortunately, some trade agreements have failed to achieve this
goal. For example, U.S. law provides that terms of patent extensions be no more than five years for a novel medicine (new molecular entity), with a limit of a single patent extension per product.
Current FTAs seem to provide for an unlimited number of patent
extensions for changes to “everyday” products. Just as bad, there
are no limitations on the duration of each of those extensions.
U.S. law also mandates that generic companies have the right to
research an innovator company’s drug during the patent term so
that a more affordable generic version may be developed promptly
upon patent expiration. This is commonly referred to as the “Bolar”
provision. Recent FTAs fall short of U.S. law by not requiring the
adoption of a Bolar principle and, instead, only allowing a permissive provision, at best, to be included in the agreement.
Strengthening and
improving the patent
system is a laudable goal,
but Congress needs to
examine whether what
appear to be simple
changes could have the
unintended consequences
of weakening the U.S.
patent system and
delaying consumer access
to affordable medicines.
With the expiration of Trade Promotion Authority (TPA) on July 1,
2007, Congress will have a unique opportunity to restore the balance
between drug innovation and access to affordable medicines. While
the United States Trade Representative (USTR) is required by law to
foster innovation, USTR must also advocate for the proper balance
between brand pharmaceutical innovation and access to generic medicines. TPA reauthorization must ensure that both American and global
consumers have access to safe, effective, and affordable medicines.
Specifically, Congress should ensure that FTAs do not block generic
competition both domestically and abroad nor delay the timely
access of affordable medicines. FTA language that would allow
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brand companies to expand their monopolies at the expense of consumers, insurers and government health care programs must be
made consistent with U.S. law.
CITIZEN PETITIONS
Although U.S. citizens have a right to petition the federal government,
some brand pharmaceutical companies, their lawyers, or others
routinely file citizen petitions regarding pending Abbreviated New
Drug Applications (ANDA) with FDA on the eve of a generic product’s approval. Upon receipt, FDA typically delays ANDA approval
until it has completed its lengthy citizen petition review process,
resulting in generic market entry delays of months, if not years. And
most citizen petitions are being filed not to raise legitimate issues,
but to block consumer access to competition from affordable generic
medicines. In fact, a Merrill Lynch review of citizen petitions filed
between 2000-2005 found that more than three-quarters of them
were dismissed as having no merit.
GPhA is encouraging FDA and Congress to address the abuse of the
citizen petition process through regulatory or legislative reforms.
Specifically, GPhA is urging FDA to support a bifurcated system that
allows the generic approval process to continue while a petition is
reviewed in order to maintain the goal of ensuring timely consumer
access to affordable medicines. The approval of a generic drug
should not be linked to the resolution of a citizen petition. There are
no statutes or regulations requiring that FDA refrain from approving
an ANDA until citizen petitions are resolved.
OGD FUNDING, USER FEES AND THE
PRESCRIPTION DRUG USER FEE ACT
Over the past 20 years,
we have successfully
challenged questionable
patents by either winning
or settling by early entry,
generating tens of billions
of dollars in savings for
American consumers.
In 2006, both the House and Senate took steps to provide OGD with
more funding to better deal with the growing number of generic
applications. Although Congress adjourned without approving a final
budget for Fiscal Year 2007, some lawmakers have indicated that they
will continue to promote an increased budget for OGD. Already, OGD
should receive more money through a “continuing resolution” that
funds government agencies through the end of Fiscal Year 2007.
In its Fiscal Year 2008 budget, the Bush Administration has proposed user fees for the generic drug industry. While GPhA is open
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to discussing ways to speed up the review of generic applications, user fees alone
will not get drugs to consumers faster if Congress does not remove existing barriers,
including citizen petitions and authorized generics, and address the absence of an
abbreviated approval pathway for biogenerics.
The issue of user fees will be debated when Congress reauthorizes the Prescription
Drug User Fee Act. Under this Act, when a brand company submits a new drug application to the FDA for review, it pays a user fee. The fee guarantees that the FDA will
review the brand application and make a decision within a six- to 10-month timeframe, depending on whether the application is considered under a priority or standard review.
By contrast, when a generic company submits an application to the FDA, its approval
can be delayed by a variety of outside business and legal tactics, such as citizen petitions, authorized generics, and administrative hurdles, such as last-minute labeling
changes and scientific consults. For example, on the eve of a generic application’s
approval, brand companies often file citizen petitions with FDA. Instead of moving
forward with the approval, FDA puts the generic application on hold until it can review
the issues raised in the citizen petition, regardless of their merit.
Thus, while user fees might result in faster review times, they will not guarantee that
medicines get to consumers faster unless barriers to market entry are removed.
PEDIATRIC RESEARCH
In 2007, Congress must reauthorize the Pediatric Research Equity Act and the Best
Pharmaceuticals for Children Act, which provide companies with incentives to undertake pediatric research. GPhA strongly supports pediatric research and the need to
address the serious lack of clinical information on the safe and effective use of drugs
in children.
As Congress considers reauthorizing these Acts, it needs to determine whether the
American health care system is receiving the best clinical research and information
in return for an additional six months of exclusivity for the entire family line of the
product studied. It is vitally important to ensure greater access to medicines for children, but it is fair to question whether the system is working as effectively and efficiently as possible.
21
2006
GPHA EVENTS
Top row (l. to r.): Industry experts discuss pharmaceutical
pedigree standards at GPhA’s Annual Policy Conference;
Former U.S. Deputy Secretary of State Richard Armitage
addresses the Annual Meeting; and Apotex Corporation
President and GPhA Board member Tammy McIntire (far
right) chats with industry colleagues.
22
Middle: Rep. Henry Waxman offers his outlook on biogenerics
at the Annual Meeting; West Virginia Governor Joe Manchin
delivers a keynote address; IMS Health’s Graham Lewis provides
the latest global industry statistics; Former CMS Administrator
Dr. Mark McClellan reviews the Medicare Part D program at the
Annual Policy Conference.
Bottom: GPhA President and CEO Kathleen Jaeger meets
with Senator Orrin Hatch; Watson Pharmaceuticals’ VP and
GPhA Board member Tom Long and his colleagues listen to
presentations; Barr Pharmaceuticals Chairman and CEO Bruce
Downey delivers his first speech as GPhA’s Chairman of the
Board; GPhA’s Board of Directors makes plans in 2006.
23
KEY
FINANCIALS
U.S. MARKET BRAND AND GENERIC
PHARMACEUTICAL SALES
TOP SEVEN MARKETS* BRAND AND GENERIC
PHARMACEUTICAL SALES
271.5
300
250
225.5
150
100
30.7
50.8
45.9
41.1
36.7
164.5
200
246.3
200
50
250
300.2
285.3
SALES IN U.S. $ BILLION
SALES IN U.S. $ BILLION CONSTANT
350
182.3
198.1
20.5
23.1
206.1
220.6
150
100
17.6
50
12.9
0
2002
2004
BRANDED GENERICS
27.4
22.4
18.5
16.7
2003
BRANDS
25.0
2005
26.7
2006
UNBRANDED GENERICS
Source: IMS National Sales Perspective™, December 2006.
0
2002
2003
2004
2005
2006
BRAND
GENERICS
*United States, Canada, France, Germany, Italy, Spain and United Kingdom
Source: IMS MIDAS New Market Segmentation,12 months ending Sept. 2006. Rx Bound: Ethical market only.
Market Segmentation international definition of generics includes unbranded generics and some
branded generics.
U.S. RX DISPENSED
U.S. PHARMACEUTICAL SALES
MARKET SHARE BY TOTAL PRESCRIPTIONS DISPENSED
MARKET SHARE BY DOLLARS
100
90
80
70
60
50
40
30
20
10
0
BRANDS
7%
9%
8%
9%
8%
10%
9%
10%
10%
10%
84%
83%
83%
81%
80%
2002
2003
2004
2005
2006
BRANDED GENERICS
100
90
80
70
60
50
40
30
20
10
0
Teva Pharmaceuticals USA
Novartis (Sandoz)
Mylan Laboratories, Inc.
Watson Pharmaceuticals
Pfizer (Greenstone)
Apotex Corporation
Par Pharmaceuticals
Barr Labs (incl. Pliva)
Boehringer Ingelheim
Hospira, Inc.
Source: IMS National Prescription Audit, National Sales Perspective, December 2006. The market is total
U.S. prescription products only, all channels.
24
30%
VOLUME (S.U.)
Mylan Laboratories, Inc.
Novartis (Sandoz)
Mallinckrodt
Barr Labs (incl. Pliva)
Actavis US
Qualitest Products
Par Pharmaceuticals
Pfizer (Greenstone)
46%
11%
11%
44%
49%
46%
2002
2003
2004
BRANDED GENERICS
50%
54%
10%
9%
40%
37%
2005
2006
UNBRANDED GENERICS
U.S. SECTOR GROWTH
25%
SALES GROWTH %
1
2
3
4
5
6
7
8
9
10
SALES ($ constant)
43%
Source: IMS NPA™ Plus, IMS National Sales Perspectives™, December 2006
U.S. TOP 10 CORPORATIONS BY SALES AND RX
OF UNBRANDED GENERICS, 2006
RANK
11%
BRANDS
UNBRANDED GENERICS
Source: IMS NPA™ Plus, IMS National Sales Perspectives™, December 2006
40%
27 5%
27.5%
23 2%
23.2%
%
20%
15%
10%
18.7%
15.3%
12 6%
12.6%
11.4%
5%
0%
9.7%
20.6%
22.3%
19.8%
18.7%
6.9%
8.3%
6.5%
8.3%
5.4%
2003
TOTAL MARKET
2004
UNBRANDED GENERICS
Source: IMS National Sales Perspective, December 2006
2005
BRANDED GENERICS
2006
BIOTECH
TOP 20 MOLECULES,
U.S. RX, 2006
MONTHS
MEDIAN APPROVAL TIMES ANDA ORIGINALS
19.5
19
18.5
18
17.5
17
16.5
16
15.5
15
MOLECULE
18.9
18.4
18.3
17.3
2000
2001
2002
2003
16.3
16.3
2004
2005
16.6
2006
Source: FDA Office of Generic Drugs, 2006
COMPARISON OF RECEIPTS AND APPROVALS
OF ANDA APPLICATIONS
800
766
700
NUMBER OF SUBMISSIONS
600
563
TRX (MILLIONS)
Acetaminophen
Hydrocodone
Hydrochlorothiazide
Lisinopril
Amoxicillin
Metformin
Levothyroxine
Atenolol
Albuterol
Furosemide
Alprazolam
Azithromycin
Oxycodone
Metoprolol
Ibuprofen
Warfarin
Codeine
Prednisone
Triamterene
Lorazepam
184.8
117.7
97.3
80.0
74.0
51.9
49.8
49.5
46.5
44.3
38.2
36.5
33.9
30.0
29.3
26.7
26.6
25.5
24.2
23.8
TOP 20 MOLECULES,
U.S.SALES, 2006
MOLECULE
SALES $ (MILLIONS)
Simvastatin
Azithromycin
Oxycodone
Fentanyl
Clopidogrel
Acetaminophen
Fexofenadine
Amoxicillin
Sertraline
Clavulanic Acid
Gabapentin
Omeprazole
Fluticasone
Metformin
Hydrocodone
Pravastatin
Lisinopril
Albuterol
Paroxetine
Bupropion
1497.8
1105.0
984.2
929.6
901.7
892.5
827.2
815.8
749.4
667.2
573.6
561.3
533.9
523.4
498.1
461.5
432.5
413.4
403.4
387.9
500
449
400
346
335
300
200
261
256
214
307
232
230
361
361
335
326
Source: IMS National Prescription Audit, National Sales Perspective, December 2006.
Market is U.S. prescription products, all channels. Unbranded generics only.
296
320
284
BLOCKBUSTERS EXPECTED TO
LOSE EXCLUSIVITY
241
198
100
0
2000
RECEIPTS
2001 2002
2003
2004 2005 2006
2007 2008 2009
COUNTRY
2006
2007
2008
2009
U.S.
Flixonase/Flonase
Mobic
Pravachol
Wellbutrin XL
Zocor
Zofran
Zoloft
Kredex/Coreg
Norvasc
Risperdal
Stilnox/Ambien
Zyrtec
Betaloc/Toprol XL
Effexor
Fosamax
Lamictal
Topamax
Seretide/Advair
Valcote/Depakote
Alna/Flomax
Imigran/Imitrex
Ogastro/Prevacid
Valtrex
FRANCE
Alna/Harnal
Imigran
Pravachol
Zithromax
Lamisil
Lanzor/Takepron
Lovenox
Norvasc
Risperdal
Zofran
Casodex
Effexor
Pariet
Cozaar
Gemzar
Pantozol
Prograf
Proscar
Topamax
Valtrex
Xalatan
GERMANY
Alna/Harnal
Eloxatine
Imigran
Zithromax
Zofran
Norvasc
Proscar
Risperdal
Effexor
Cozaar
Gemzar
Pantozol
Prograf
Topamax
Valtrex
Wellbutrin
U.K.
Alna/Harnal
Imigran
Zithromax
Zofran
Norvasc
Proscar
Risperdal
Casodex
Effexor
Seretide
Cozaar
Gemzar
Pantozol
Prograf
Topamax
Valtrex
FISCAL YEAR TOTALS
APPROVALS
Source: FDA Office of Generic Drugs, 2006
TOP 10 PHARMACEUTICAL MARKETS
WORLDWIDE
SALES U.S.$ B
GLOBAL
U.S.
Japan
France
Germany
Italy
U.K.
Spain
Canada
China
Brazil
TOP 10
593.4
267.1
56.9
32.8
31.4
20.2
19.9
15.6
15.1
10.3
8.6
478.0
GROWTH % MARKET SHARE %
6.3
6.5
1.4
3.9
2.6
6.8
2.6
7.3
7.8
12.9
13.9
5.6
100.00
45.0
9.6
5.5
5.3
3.4
3.4
2.6
2.5
1.7
1.4
80.6
Source: IMS Midas, 12 months ending September 2006, includes Rx and some OTC products.
Source: IMS MIDAS, MAT, September 2006. New Market Segmentation Feature
25
BOARD OF
DIRECTORS
EXECUTIVE COMMITTEE OF THE BOARD
BOARD OF DIRECTORS, 2006
Chairman
Bruce Downey
Chairman and CEO
Barr Pharmaceuticals, Inc.
Vice Chairman
Heather Bresch
Senior Vice President, Strategic
Corporate Development
Mylan Laboratories Inc.
Secretary/Treasurer
Rosendo Ferran
Senior Consultant
New Chemic, Inc.
Bernhard Hampl
President and CEO
Sandoz US
William Marth
President and CEO
TEVA Pharmaceuticals USA
26
Christopher Begley
Chief Executive Officer
Hospira, Inc.
Tom Long
Vice President, Government Affairs
Chuck Caprariello
Vice President of Corporate
Communications and Government
Affairs
Ranbaxy, Inc.
Ed Maloney
Vice President of Operations
Paddock Laboratories
Miles Davis
President
Sovereign Laboratories
Thomas J. Haughey
Executive Vice President and
General Counsel
Par Pharmaceuticals
Tammy McIntire
President
Apotex Corporation
Max Mendelsohn
Special Projects Executive
Impax Laboratories, Inc.
Tom Murphy
President and COO
Ben Venue Laboratories
Chris Hendy
President and CEO
Novum Pharmaceutical Research
Services
Joseph Pizza
Chief Executive Officer
Interchem Corporation
John LaRocca
Vice President, Legal Affairs
Actavis
Richard H. Roberts
President and CEO
URL/Mutual
Adam Levitt
Executive Vice President and
General Manager
Perrigo Company
Vincent Ursino
President
Vinchem, Inc.
STAFF
Kathleen Jaeger
President and CEO
Jason Money
Director of Government Affairs
Reilly O’Connor
Director of Government Affairs
Gordon Johnston
Vice President
of Regulatory
Sciences
Shawn Brown
Director of Policy
Andrea Hofelich
Director of Media Relations
Rachelle Kosky
Director of Finance and Operations
Gary Heimberg
Vice President of
Federal Affairs
Kathleen Wolff
Senior Director of Events
Jennie May
Senior Events Coordinator
Bruce Lott
Vice President of
State Affairs
Jennifer Sunshine
Manager of Policy and
Regulatory Affairs
Cookie Cottrell
Executive Assistant to the
President and CEO
Lorrie McHugh
Senior Consultant,
Public Affairs
Trachelle Carr
Receptionist
27
COMMITTEES
& TASK FORCES
John LaRocca
Actavis
Tom Long
Watson Pharmaceuticals, Inc.
Roberta Loomar
Andrx Corporation
Vivion Maisenbacher
Maisenbacher and Associates
AUDIT AND INVESTMENT
Catherine Shattuck
Rosendo Ferran
Taro Pharmaceuticals USA, Inc.
New Chemic, Inc.
Christine Sheehy
Adam Levitt
Three Rivers Pharmaceuticals
Perrigo Company
JoAnn Suskin
Max Mendelsohn
Apotex Corporation
Allen Torres
Eric Pomerantz
ThePharmaNetwork, LLC
Sandoz Inc.
GOVERNMENT AFFAIRS
Ed Maloney
Trish McAdoo
Henry Menn
Ben Venue Laboratories, Inc.
Jan Meyers
Ranbaxy, Inc.
Debra Barrett
Robert Milanese
FINANCE AND
TECHNOLOGY
RSM Pharmaceutical Services
Inc.
Susan Badia
Robert Billings
Jerry Moore
X-Gen Pharmaceuticals, Inc.
Richard Burcham
Andrew Boyer
Gil Preston
BPI Technologies
Alexander Cossin
William Burke
Juliana Reed
The Washington Group
Hospira World Wide Inc.
Dan Cullinan
Chuck Caprariello
David Rice
Perrigo Company
Ranbaxy, Inc.
Steve D’Alessandro
Tanya Carone
Thomas Russillo
GenPharm Inc.
Upsher-Smith Laboratories, Inc.
Rachelle Gotto
David Chinnock
Brian Schuster
Perrigo Company
Kim Granger
Alexander Cossin
Catherine Shattuck
Michael Hinckle
Brent Eilefson
Terri Stewart
Synthon Pharmaceuticals, Inc.
Barr Laboratories, Inc.
Melissa Johannessen
Paul Fagan
Leah Summers
Three Rivers Pharmaceuticals
Andrea Johnson
Steve Giuli
Vince Suneja
Actavis US
Apotex Corporation
Catherine Liles
Steve Goodman
Ashlea Thomas
Watson Generics
Gerald Monigle
Beth Hamilton
Rich Wheland
URL/Mutual
Apotex Corporation
Tom Moore
Jake Hansen
Randall Wilson
Apotex Corporation
Roxane Laboratories
Dilip Parikh
Ron Hartmann
Sandoz Inc.
Tim Sawyer
Michael Hinckle
28
MEMBERSHIP
Siobhan Barr
MDS Pharma Services
David Hanson
Interchem Corporation
Max Mendelsohn
Branko Pejic
Greenblum & Bernstein PLC
Stephen Roylance
Greenblum & Bernstein PLC
Shashank Upadhye
Sandoz Inc.
POLICY COMMITTEE
Debra Barrett
Robert Billings
Heather Bresch
Chuck Caprariello
Ranbaxy, Inc.
Alexander Cossin
Brent Eilefson
Steve Giuli
Apotex Corporation
Lori Greene
Stiefel Laboratories, Inc.
William Haddad
Biogenerics Inc.
Jake Hansen
Ron Hartmann
Sandoz Inc.
Ian Hilley
GenPharm Inc.
Michael Hinckle
Tom Long
Roberta Loomar
Andrx Corporation
Robert Milanese
Sandoz Inc.
Mark Moshier
Matrix Laboratories, Inc.
Eric Pomerantz
Sandoz Inc.
Juliana Reed
Mark Robbins
Catherine Shattuck
Jennifer Spokes
Andrx Corporation
Wayne Stargel
Terri Stewart
Leah Summers
Robert Sykora
Glades Pharmaceuticals, LLC
Ashlea Thomas
Jeff Thompson
Glades Pharmaceuticals, LLC
Shashank Upadhye
Sandoz Inc.
TECHNICAL ADVISORY
COMMITTEE
Siobhan Barr
MDS Pharma Services
Paul Benninger
Allied Research International
Inc.
Rebecca Braatz
Roxane Laboratories
Beth Brannan
Sandoz Inc.
John Capicchioni
Cetero Research
James Carlson
Cetero Research
Joyce Anne DelGaudio
Watson Laboratories, Inc.
Paul Fackler
Cynthia Farner
Robert Gerenz
Manish Issar
John Kovaleski
Marc Falkin
Steve Giuli
Blynda Masters
Andrx Corporation
Apotex Corporation
Ranbaxy, Inc.
Kiran Krishnan
David Gaugh
Steve Goodman
James Meehan
Apotex Corporation
Watson Generics
Ranbaxy, Inc.
Lisa Kukuzke
Jake Hansen
Jake Hansen
Peter Meehan
Ranbaxy, Inc.
Prakash Kulkarni
Ron Hartmann
Ron Hartmann
Jerry Moore
Sandoz Inc.
Sandoz Inc.
Prasanna Kumar
Michael Hinckle
Michael Hinckle
Manoj Patel
Dr. Reddy’s Laboratories Inc.
Amide Pharmaceutical, Inc.
Marcy Macdonald
David Hsia
Tom Long
Gil Preston
Hospira, Inc.
Christine Mundkur
Tom Long
William Marth
Kumaresh Rajaram
Ranbaxy, Inc.
Vikas Narendra
Marcy Macdonald
Lesli Paoletti
Mark Ramsey
Ind-Swift Laboratories Inc.
Hospira, Inc.
Kurt Nielsen
Henry Menn
Eric Pomerantz
Juliana Reed
URL/Mutual
Sandoz Inc.
Chris Pelloni
Christine Mundkur
Jagadesh Rajan
Roger Reimink
Ranbaxy, Inc.
Perrigo Company
Kalpana Rao
Chirag Patel
Juliana Reed
David Rice
Amneal Pharmaceuticals, LLC
Molly Rapp
Eric Pomerantz
Rick Rogerson
Tim Sawyer
Sandoz Inc.
Susan Schniepp
Juliana Reed
Leah Summers
Mike Sellers
Hospira, Inc.
Hospira, Inc.
Kumara Sekar
Leah Summers
Vince Suneja
Paul Simon
Dr. Reddy’s Laboratories Inc.
Perrigo Company
Woody Stiles
Vince Suneja
John Wodarczyk
Michael Smith
Johnson Matthey
Pharmaceutical Services
Kenton Walker
RFID/PEDIGREE TASK
FORCE
Vince Suneja
Leah Summers
Gabrielle Yen
GYMA Laboratories
BIOPHARMACEUTICALS
TASK FORCE
Debra Barrett
Robert Billings
Yashwant Deo
AviGenics, Inc.
Charles DiLiberti
Tanya Dobash
Chuck Ebert
Lisa Yerk
Valan Arasu
Marcia Tucker
Ranbaxy, Inc.
Apotex Corporation
Shian Zhu
Chuck Caprariello
Lonny Wittnebel
Ranbaxy, Inc.
MEDICAID TASK FORCE
Karen Andrus
Par Pharmaceuticals, Inc.
Robert Billings
Andrew Boyer
Garrick Campbell
Tim Catlett
Scott Cormiea
Denise Demkowicz
Nancy Wolter
GeneraMedix, Inc.
Steve Giuli
Mary Woods
Apotex Corporation
Dale Gormley
Thom Harrison
Ron Hartmann
Sandoz Inc.
Tom Long
29
2300 Clarendon Boulevard
Suite 400
Arlington, VA 22201
phone 703.647.2480
fax 703.647.2481
www.gphaonline.org
© 2007 Generic Pharmaceutical Association.
All rights reserved. No portion of this publication
may be reproduced without the written consent
of the President of GPhA.
30

Prescription for Affordable Health Care ANNUAL REPORT 2007

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