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CU endorses bill which will help bring generic drugs to market faster

April 6, 2007
The Honorable Bobby Rush
Subcommittee on Commerce, Trade and Consumer Protection
U. S. House of Representatives
Washington, DC 20515
Dear Mr. Chairman:
Consumers Union, the independent, non-profit publisher of Consumer Reports, endorses the bill that you and Rep. Waxman are introducing to stop anti-competitive collusion between various brand and generic drug companies. Your bill, the “Protecting Consumer Access to Generic Drugs Act of 2007,” will be a major help to consumers by stopping anti-competitive arrangements between drug manufacturers that have the effect of keeping generic drugs from the marketplace.
As you so well know, prescription drug inflation has been running about twice the rate of general consumer inflation and prescription drugs are a major taxpayer cost to Medicare, Medicaid, and other public programs. One of the best ways to slow or moderate drug inflation is through competition from generics, which usually sell at 60 to 80 percent of the cost of brand name drugs. The more generic drug competition, the more consumers and taxpayers can save. For example, our Consumer Reports “Best Buy Drugs” free public education project is designed to improve health outcomes by helping patients and their physicians identify the safest, most cost-effective medicines; this program has often identified generics as a way to save individual consumers literally thousands of dollars a year while providing safe and effective quality.
Unfortunately, in the last several years, a legal interpretation has developed wherein brand drug manufacturers have basically been able to pay generic manufacturers to delay or withhold their generic drugs from the marketplace. We believe this is a misguided interpretation that is blatantly anti-competitive and anti-consumer. If allowed to continue these unfair methods of competition will cost patients, consumers, and taxpayers billions and billions of dollars.
Your legislation will end these anti-competitive practices, while allowing for exceptions in cases where the Federal Trade Commission finds that arrangements between brand and generic companies can, in fact, be pro-consumer.
We hope that your bill receives wide co-sponsorship, and we look forward to working with you on its passage.
William Vaughan
Senior Policy Analyst (Health)
Washington Office
cc: Members of House Energy and Commerce Committee