[Congressional Record Volume 157, Number 25 (Wednesday, February 16, 2011)]
[Senate]
[Page S797]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. ROCKEFELLER (for himself, Mrs. Shaheen, Mr. Leahy, Mr. 
        Inouye, Ms. Stabenow, and Mr. Schumer):
  S. 373. A bill to amend the Federal Food, Drug, and Cosmetic Act to 
prohibit the marketing of authorized generic drugs; to the Committee on 
Health, Education, Labor, and Pensions.
  Mr. ROCKEFELLER. Mr. President, I rise today with my colleagues, 
Senators Shaheen, Leahy, Inouye, Stabenow, and Schumer, to reintroduce 
an important piece of legislation, the Fair Prescription Drug 
Competition Act. Our legislation eliminates one of the most prominent 
loopholes that brand name drug companies use to limit consumer access 
to lower-cost generic drugs; it ends the marketing of so-called 
``authorized generic'' drugs during the 180-day exclusivity period that 
Congress designed to provide specific incentives to true generics to 
enter the market.
  An authorized generic drug is a brand name prescription drug produced 
by the same brand manufacturer on the same manufacturing lines, yet 
repackaged as a generic. Some argue that authorized generic drugs are 
cheaper than brand name drugs and, therefore, benefit consumers. 
However, authorized generics only serve to reduce generic competition, 
extend brand monopolies, and lead to higher health care costs for 
consumers over the long-term.
  After up to 20 years of holding a patent for a brand name drug--the 
brand-name manufacturer--which has already been handsomely rewarded for 
its investment--doesn't want to let go of its profits. So, it 
repackages the drug and refers to it as a generic in order to extend 
its market share, while cutting in half the financial incentive for an 
independent generic to enter the marketplace. This is a huge problem 
and one that is becoming even more prevalent as patents on some of the 
best-selling brand name pharmaceuticals expire.
  In 1984, Congress passed the Drug Price Competition and Patent Term 
Restoration Act, known as the Hatch-Waxman Act, to provide consumers 
greater access to lower-cost generic drugs. The intent of this law was 
to improve generic competition, while preserving the ability of brand 
name manufacturers to discover and market new and innovative products. 
Specifically, the Hatch-Waxman Act provided for a 180-day marketing 
exclusivity period for the first generic firm that successfully 
challenges a brand-name patent under the Abbreviated New Drug 
Application, ANDA, process--thereby providing a crucial incentive for 
generic drug companies to enter the market and make prescription drugs 
more affordable for consumers.
  Filing a patent challenge is expensive and requires enormous up-front 
costs for the generic company. Yet, the 180-day exclusivity incentive 
to launch a patent challenge is being widely undermined by authorized 
generics. According to one account, since 2004, ``authorized generic 
versions have appeared for nearly all drugs with expiring U.S. 
patents.'' And, because authorized generics are still allowed, an 
independent generic can get all the way to the end of a patent 
challenge--even winning in court--but still lose the anticipated reward 
of 180-day market exclusivity because the brand-name company can, and 
does, launch an authorized generic. The fact that the brand-name 
company can launch an authorized generic even if it loses a patent 
challenge to a generic company gives it an incentive to pursue multiple 
additional patents on dubious grounds, just for the sake of extending 
its market share. The fact remains that brand-name firms regularly 
introduce authorized generics on the eve of generic competition, 
further extending their hold on the market and chilling competition 
from independent generic drugs.
  Every American agrees on the need to reduce health care costs. Today, 
generic medications comprise 69 percent of all prescriptions in this 
country, yet only 16 percent of all dollars spent on prescriptions. 
Furthermore, in 2007, the average retail price of a generic 
prescription drug was $34.34, compared to the $119.51 average retail 
price of a brand name prescription drug. In fact, generic drugs save 
consumers an estimated $8 billion to $10 billion a year at retail 
pharmacies. For working families, these savings can make a huge 
difference, particularly during difficult economic times.
  Passage of the Fair Prescription Drug Competition Act would 
revitalize and protect the true intent of the 180-day marketing 
exclusivity period created in the Hatch-Waxman Act. This bill does just 
that by eliminating the authorized generics loophole, protecting the 
integrity of the 180-day exclusivity period, and improving consumer 
access to lower-cost generic drugs.
  I urge my colleagues to support this timely and important piece of 
legislation.

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