    [Public Papers of the Presidents of the United States: George W. Bush (2002, Book II)]
    [October 21, 2002]
    [Pages 1848-1850]
    [From the U.S. Government Publishing Office www.gpo.gov]

     Remarks on Prescription Drugs
     October 21, 2002

         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 Advisers, 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    diseases, major surgery has been replaced by a single pill.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

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    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 3 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

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    with modest means through our Medicaid Pharmacy Plus Program. We're
    working to provide seniors on Medicare with drug 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.

      Note:  The President spoke at 8:33 a.m. in the Rose Garden at the
    White House. The Office of the Press Secretary also released a Spanish
    language transcript of these remarks.