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Generic Pharmaceutical Association (GPhA) Statement On PhRMA Assessment Of Authorized Generics

6/28/2006 1:04:45 PM

ARLINGTON, Va., June 28 /PRNewswire/ -- The Generic Pharmaceutical Association (GPhA) today issued the following statement in response to a news release issued by PhRMA on its study assessing the practice of "authorized generics" in the United States.

"The Generic Pharmaceutical Association (GPhA) believes that the press release and study unveiled by PhRMA regarding its assessment of the marketing of authorized generics misrepresents the real issues related to this practice. It is understandable that the public and the media would interpret this analysis to reflect consumer pricing. Given that this data represents pharmaceutical distribution data -- not retail consumer data -- the result is an inaccurate implication that consumers will realize savings from authorized generics.

As other loopholes in the Hatch-Waxman Act have been closed, brand pharmaceutical companies have turned to the use of authorized generics to create a chilling effect on generic companies pursuing future patent challenges. Under the Hatch-Waxman legislation, Congress created the patent challenge process to provide the necessary checks and balances to the brand-generic patent system. Authorized generics will lead to delayed generic competition and a substantial reduction in savings for all consumers and America's health care system.

Authorized generics are nothing more than brand pharmaceutical products masquerading as generics. Authorized generics, when the brand company introduces or licenses a "generic" version of its product, compete with the true generic during the 180-day exclusivity period, following a successful patent challenge by a generic manufacturer. This practice has only appeared over the past several years, in part as a result of reforms under MMA that closed loopholes that delayed generic competition. Its only intent is to manipulate the market in a manner that interferes with competition from the true generic product following a successful patent challenge.

The patent challenge provisions of the Hatch-Waxman Act provide generic companies with 180-days of marketing exclusivity if they are successful in bringing a patent challenge for a weak or questionable patent that unnecessarily prevents competition. Authorized generics devalue this 180-day exclusivity incentive. They represent an anti-competitive response designed to deter generic companies from pursuing patent challenges, by significantly diminishing the potential incentive that enables generic companies to recoup their investment of millions of dollars necessary to bring future patent challenges.

Patent challenges have already saved consumers tens of billions of dollars by enabling the introduction of generic competition earlier than would have been possible without the patent challenge. Authorized generics, if allowed to remain unchecked by Congress, could severely curtail future patent challenges allowing brand companies once again to evergreen patents and substantially delay consumer access to affordable medicine.

GPhA strongly urges Congress to close this loophole in the Hatch/Waxman Act and restore the careful balance achieved by the Hatch-Waxman Act. Preserving the 180-day exclusivity period by preventing the introduction of authorized generics during the exclusivity period will ensure that the generic patent challenge process, which has saved billions of dollars, is preserved."

GPhA represents the manufacturers and distributors of finished generic pharmaceuticals, manufacturers and distributors of bulk active pharmaceutical chemicals, and suppliers of other goods and services to the generic drug industry. Generics represent 56% of the total prescriptions dispensed in the United States, but less than 13.1% of all dollars spent on prescription drugs. For more information about the industry, visit

The Generic Pharmaceutical Association

CONTACT: Andrea Hofelich, +1-703-647-2495, for The Generic PharmaceuticalAssociation

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