Drug Companies Preventing Generic Drugs

ByABC News
May 1, 2001, 6:19 PM

F O R T  L A U D E R D A L E, Fla., May 1 -- If you had a choice between a costly prescription drug and its cheaper, generic version, which would you choose? Often, do you even have the choice?

While 3 billion prescriptions are filled annually, 44 percent are filled generically yet that equals only 10 percent of the nation's drug bill. Americans spend $145 billion per year on prescription drugs, according to IMS Health, which provides market research to pharmaceutical and marketing companies.

And the pharmaceutical companies that make the brand name drugs want to keep it that way.

Legislation was introduced in Congress today to reform the laws regulating when particular drugs may be sold in their generic form. This is important to consumers because the generic drug, which won't have a brand name, is, on average, 70 percent cheaper.

And according to the National Association of Pharmaceutical Manufacturers, if the number of generic prescriptions increased by a mere 1 percent, Americans would save $1.4 billion a year.

Buying Time to Maintain Price Control

Currently, pharmaceutical companies have the exclusive right to sell the drugs they develop for 20 years, the time during which the drug may not be sold in its cheaper, generic form.

But the drug companies have invariably found ways to keep the generic version of their brand name product off the market for a longer period of time to buy more time and delay market competition. The legislation introduced is designed to close the loopholes.

"You're seeing more and more brand name manufacturers keeping generic drugs out of the market place by effectively manipulating the patent system," says Nancy Chockley of the National Institute for Healthcare Management.

Andrx, a maker of generic drugs in Florida, is on the receiving end of the newest strategy. The company was ready to sell a cheaper version of Prilosec, the hugely popular drug used to treat ulcers and heartburn.

"They have been on the market with this product for approximately 13 years in the United States and had $33 billion in sales over that period of time," explains Elliot Hahn of Andrx, who thinks that is long enough.