- Proposal would remove barrier to pro-consumer, pro-taxpayer expansion of authorized generics

CINCINNATI; February 10, 2006 —As a part of his FY2007 budget, President Bush has proposed that Congress “eliminate best price practices from Medicaid [prescription drug] rebates and replace it with a budget neutral flat rebate.”(A) Comparing best price practices with a price floor, the proposal describes best price as “interfering with the competitive marketplace and preventing manufacturers from negotiating even better discounts with larger purchasers.”(A)

Recently, Congress passed a budget reconciliation law that expanded best price practices to Medicaid purchases of pharmaceuticals. Included in this legislation was language that would require authorized generics to be included in best price calculations for brand drugs. This provision could limit the incentive for manufacturers to enter into contracts with companies that offer lower-priced authorized generics, which could cost consumers up to $7 billion in higher prices over the next 30 months.

“In 1984, Congress enacted the Drug Price Competition & Patent Term Restoration Act to encourage the development of the generics industry in order to help consumers receive lower prices on prescription drugs. Authorized Generics, brand products marketed as generics under a private label, bring additional competition which can mean substantial savings to the consumer,” said E. Thomas Arington, CEO of Prasco. “We recently launched the authorized generic of Allegra®, which is responsible for saving consumers up to $190 million within six short months,” Arington stated.

Prasco has been working closely with a coalition of pro-consumer organizations dedicated to removing the best price provision from federal law and regulation. While the Medicaid expansion of best price was included in the recently passed budget reconciliation bill, pro-consumer forces in Congress were able to delay the effective date of the provision until January 1, 2007 in order for its impact to be fully considered by the Congress and the Administration.

Now, President Bush has proposed eliminating the best price framework entirely.

“We are confident that the President’s budget proposal, along with expected congressional hearings and further executive branch studies, will lead policy makers to conclude that authorized generics are an important part of the competitive landscape and can save consumers and taxpayers billions of dollars in lower-priced pharmaceuticals.

We believe that as decision-makers examine the facts, they will see the positive impact of authorized generics on consumer prescription drug spending and they will wholeheartedly endorse authorized generics,” concluded Arington.

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CONTACT:
Kimberly Carroll, Vice President Communications & Marketing Services
Prasco Laboratories
513-618-3333
website: www.prasco.com
www.authorizedgenerics.com

(A)Administration Seeks Deeper Medicaid Rx Savings Under FY 2007 Budget Request. “The Pink Sheet” February
6, 2006.