There should be no delay in getting generics on the market
Generic pharmaceuticals are crucial to the ability of individuals to afford the medicine that helps to maintain or improve their health, and as a brake on the ever-escalating cost of health care.
According to IMS Health, which analyzes health data, generic prescriptions saved consumers - including the government and, therefore, taxpayers - about $193 billion in 2011 alone. Generics are ordered in about 80 percent of all prescriptions. Americans spend more than $325 billion a year on prescription drugs.
Given the importance of generics, one would expect government policy to ensure that the drugs get to market as quickly possible.
But as demonstrated by an unfolding case before the U.S. Supreme Court, manufacturers of brand-name drugs often pay generic manufacturers to delay the introduction of the less-costly copies.
Manufacturers of new drugs are granted patents for up to 20 years, which enables them to profit and recoup the high costs of drug development. Generics can come on the market when the patents expire, but name-brand manufacturers increasingly are paying generic drug manufacturers to delay entry into the market.
According to the Federal Trade Commission, the number of play-to-delay deals increased from 28 to 40 over the last two fiscal years. In fiscal 2012, 31 brand-name drugs with annual sales of $8.3 billion did not face generics competition because of pay-to-delay deals.
The Supreme Court case is about the legality of pay-to-delay deals and related litigation, in which generic manufacturers challenge patents.
As a matter of policy, however, Congress should ensure that the value of generic drugs goes to consumers and the health care system rather than only to shareholders. And that requires the drugs to get to market.