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2018-07

Enhancing Competition in the Generic Pharmaceuticals Market

REPRESENTATIVE LOUIS RUIZ (KS), CHAIR HEALTHCARE TASK FORCE

Sponsored by: Rep. Joseph Miró (DE), Sen. Iris Martínez (IL) and Sen. Carmelo Ríos (PR)

WHEREAS, medicines are among the most powerful tools to treat, cure, and prevent illness, and are one of the only medical interventions that decrease in cost over time; and,

WHEREAS, after a limited time of patent protection, innovator medicines become generic medicines, which provide the same clinical benefits at substantial cost savings; and,

WHEREAS, a 2016 U.S. Government Accountability Office (GAO) report found that, among all generic drugs paid for by the Medicare Part D program, prices fell 59 percent from 2010 to 2015; and,

WHEREAS, the price of generic medicines that entered the market between 2011 and 2013 fell 79% within 12 months compared to only 44% for generics that entered the market between 2002 and 2004; and,

WHEREAS, the 2016 GAO report found that of the generic drugs that were on the market for the entire five-year time period analyzed, 22 percent had at least one price increase of 100 percent or more; however, the report noted that these increases “still may not result in a very high price because the beginning price was relatively low;” and,

WHEREAS, a 2016 U.S. Department of Health and Human Services Office of the Assistant Secretary for Planning and Evaluation (ASPE) issue brief on generic drug trends highlighted that “overall generic drug prices are decreasing even if trends for specific drugs may differ;” and,

WHEREAS, ASPE noted that “spikes” in generic drug prices “apply to relatively small segments of the market;” and,

WHEREAS, generic drug price spikes can be attributed to, “small markets with limited entry; the impact of mergers, acquisitions, and market exits; the ability to obtain new market exclusivities; and distribution activities.”

THEREFORE, BE IT RESOLVED, that the National Hispanic Caucus of State Legislators agrees with the authoritative research that shows that competition in the generics market drives prices down, and when there is little or no competition, an environment for higher generic drug prices can potentially be created; and,

BE IT FURTHER RESOLVED, that to improve the affordability of medicines, market factors that enable generic drug price spikes must be corrected, including FDA increasing the number and speed of generic approvals, giving priority review to Abbreviated New Drug Applications (ANDAs) for medicines with limited competition, and making information available regarding which generic medicines have limited or no competition in the marketplace.

THIS RESOLUTION WAS RATIFIED BY THE NATIONAL HISPANIC CAUCUS OF STATE LEGISLATORS ON FEBRUARY 24, 2018 AT ITS ANNUAL MEETING HELD IN CHICAGO, ILLINOIS.

  1. U.S. Government Accountability Office. Report to Congressional Requesters: Generic Drugs Under Medicare – Part D Generic Drug Priced Declined Overall, but Some Had Extraordinary Price Increases. August 2016. Available at: http://www.gao.gov/assets/680/679022.pdf
  2. IMS Institute for Healthcare Informatics. Price Declines after Branded Medicines Lose Exclusivity in the U.S. January 2016. Available at: https://www.imshealth.com/files/web/IMSH%20Institute/Healthcare%20Briefs/Price_Declines_after_Branded_Medicines_Lose_Exclusivity.pdf
  3. 315 out of 1441 drugs analyzed took “extraordinary” price increases, which equals 21.86%.
  4. U.S. Department of Health and Human Service Office of the Assistant Secretary for Planning and Evaluation. ASPE Issue Brief: Understanding Recent Trends in Generic Drug Prices. January 27, 2016. Available at: https://aspe.hhs.gov/system/files/pdf/175071/GenericsDrugpaperr.pdf
  5. Id.
  6. Id.
  7. Regulatory Affairs Professional Society. “FDA to Speed Reviews of More Generic Drugs, Offers Lists of Those With No Competition.” June 27, 2017. http://www.raps.org/Regulatory-Focus/News/2017/06/27/27979/FDA-to-Speed-Reviews-of-More-Generic-Drugs-Offers-Lists-of-Those-With-No-Competition/ ; See also, Regulatory Affairs Professional Society. “Gottlieb: FDA to Issue new Policies to Streamline Generic Reviews in 2017.” July 18, 2017. http://www.raps.org/Regulatory-Focus/News/2017/07/18/28097/Gottlieb-FDA-to-Issue-new-Policies-to-Streamline-Generic-Reviews-in-2017/