Hatch-Waxman: “If It Ain’t Broke Don’t Fix It”

Statement By 60 Plus Association President Jim Martin

“The 60 Plus Association, representing over a half-million seniors, strongly opposes S. 812, sponsored by Senators Charles Schumer (D-NY) and John McCain (R-AZ). S. 812 seeks to make changes to the existing Hatch-Waxman Act of 1984, which created a thriving generic drug market. There now exists a well balanced market for generic as well as brand drugs, therefore this legislation is not needed and in fact is bad medicine for seniors. It reminds me of the old saying, ‘if it ain’t broke, don’t fix it.’

Trying to lower prescription drug prices is admirable but I fear that this is going overboard, and while it might result in lower prices in the near term, in the long term it will hurt the discovery and mass production of future miracle drugs that we seniors are so dependent on.

Generic brands of drugs benefit from the millions of dollars of research spent by pharmaceutical companies. Patents help to secure that some of this cost can be recovered and also provides safety for patients as well. The pharmaceutical companies and the generic companies should be working hand in hand to help seniors but the road to accomplish this desired result is not more and more litigation, or more legislation such as S. 812.

If “low costs” alone wins out, we will see a retrenchment by the pharmaceutical companies in funding for research, and eventually this will reduce the availability of drugs for the generic companies, and for seniors especially.

Either litigation or legislation may temporarily bring down the cost of some drugs but either will have a chilling effect on the market place as lights will be going out in research laboratories throughout the country thus depriving senior citizens of drugs which are life-saving as well as those improving the quality of their lives.

Here are some facts about Hatch-Waxman and why it should not be changed: 1. Hatch-Waxman has created a thriving generic drug industry. Over 8000 generic applications have been filed since the passage of Hatch-Waxman and the market share for generics has increased from 19% in 1983 to almost 50% today. That means consumers now have far greater access to generic medicines than ever before.

2. Hatch-Waxman has made generic drugs available to the public much more quickly than would otherwise be possible. It created a unique exception to patent law, allowing generic manufacturers to begin making products for approval BEFORE the expiration of the original patent, resulting in making generic drugs available to the consumer much more quickly that would otherwise be possible.

3. Hatch-Waxman has worked so well that legal remedies have been needed in only a tiny fraction of cases. Despite reports to the contrary, the vast majority (94%) of generic applications filed under Hatch-Waxman have raised no patent issues. Of those that did raise issues, most were resolved out of court. There have, in fact, been fewer than 60 court decisions rendered on disputed patents issued since 1984 despite the fact that thousands of generic drugs have entered the market place. This means that consumers are not having to pay for or wait for costly and lengthy legal proceedings in order to have access to life-saving medicines.

4. Hatch-Waxman has not negatively impacted the research and development of new medicines. Of critical importance to every consumer, but particularly older Americans, are new medicines that provide treatment or even cures for chronic illnesses and life threatening conditions. Pharmaceutical research has grown from just under $4 billion in 1984 to $30 billion last year and hundreds of new drugs (miracle medicines) have entered the marketplace.

5. Hatch-Waxman protects consumer access to generic drugs. Within the next few years, more than $70 billion in brand name medicines are going to be available in generic form as long as Hatch-Waxman is there to open the door. Consumers want and need this competitive marketplace.

Hatch-Waxman has worked extremely well over its nearly 17 year history, allowing generic drugs to gain half the market share. Don’t throw the baby out with the bathwater.

Schumer- McCain is bad medicine for seniors and should be rejected.

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