Debates for Improvement in Affordable Medicinal Costs, Highlights Risks And Benefits to Brand Name Exclusivity Patent Laws.

One of the primary initiatives that has come from discussions on healthcare reform has been the need to bring down the costs of medicines to make them more affordable.  Challenges to healthcare reform however show that prescription drug spending has increased significantly over the past 20 years with its growth hovering around the 12% mark annually. The impact of these accelerated costs has encouraged lawmakers to legislate policies that endorse changes to the pricing of medicine to mitigate costs that will allow affordable medicines.

With the passing of the McCain-Schumer generic drug bill, and the Hatch-Waxman act both pieces of legislation effectively changed the competition between brand-name and generic drugs that are used to manage medicinal costs with direct ties to promoting healthcare reform.

The prominence of these two measures has helped to slow down the increased costs for brand named medicines, however has also drawn changes to the 14 year patent period of medicines churned out by the pharmaceutical industry that controls the marketing of their brand’s products without infringement from generic brand companies under the federal licensing laws of the FDA.

The goal to provide affordable medicines through measures that change market by generic brand companies quicker have the potential to now reduce the length of a pharmaceutical and biotechnology companies patent licensing.

Right now improved access to affordable medicines has been thwarted in the US since the allowed costing of brand names drugs is significantly higher when compared to the generic brand name costs. However with proposals to changes those laws that oversee market access of brand name drugs vs. generic drugs, costs that normally go as high as the thousands per month for some individuals would now be able to take advantage of the competition by generic manufacturers to produce lower-cost versions after just five years on the market, if this new congressional proposal passes.

Consequently, without the startup costs for development of the drug other companies can afford to make and sell it more cheaply. When multiple companies begin producing and selling a drug, the competition among them can drive the price down even further.

Trademark laws in the United States do not allow the generic drugs to look exactly like the brand-name preparation, but the active ingredients must be the same in both preparations, ensuring that both have the same medicinal effects.

Today, generic drugs account for 63% of all U.S. prescriptions for drugs, and sell at a significantly lower price than their brand name counterparts – with impact on consumer prescription costs that are in the tens of billions of dollars per year. Moreover their expanded role has been linked to an reduction of overall price increases for prescription drugs, from 2007 to 2010, with 110 drugs estimated to lose their patent protection, such as Norvasc (amlodipine), Imitrex (sumatriptan), Fosamax (alendronate), and Risperdal (risperidone). Cost research suggests that the impact of these 110 drugs alone that are anticipated to reach a $50 billion mark per year in sales, would impact the consumer market index of drug costs significantly, and generate greater savings for the consumers of prescription drugs.

Prior to 1984, generic-drug makers complied with the requirements to conduct the same safety and efficacy trials that are required by the original pharmaceutical companies to receive the Food and Drug Administration (FDA) approval for marketing. These requirements were shown to not be economically feasible in bringing generics to the market. However the Hatch-Waxman Act legislatively changed this requirement with features that affected competition between brand-name, and generic drugs to allow a more abbreviated process for generic brand approvals.

At this time the legislation proposed by Sen. Schumer (D-N.Y) that provides generic drug makers a speedy and low-cost pathway for generic drugs to market has caused much debate. The efforts to change patent law has many risks, one of those is recognizing the complex undertaking and costly requirements needed to develop novel drugs. Secondly, a shortened exclusivity period would dissuade the pharmaceutical and biotechnology industry from investing in drug development, and would polarize the market. Lastly, the impact of all of the aforementioned points would ultimately reduce the number of high-quality, science based jobs generated by the industry.

Controlling drug costs is a difficult task, as result of the efforts that are required to create original medicines for complexly acute and chronic conditions. The need to provide affordable medicines is a top priority, however a balance needs to be struck on how to do that. Congress is weighing the debate and political figures such as Ted Kennedy (D-MA) has suggested that a 5-year exclusivity on original medicines is unreasonable, and has proposed a 12 year patent legislation instead – that would work more reasonably across both sides of the aisle. Additionally, Sen. Kennedy’s proposal would better mirror the European Union’s market protection exclusitivity legislation that is used currently and provides 11 years of market protection for original brand products.

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