What’s at Stake?
The drug industry’s monopoly pricing power over biologic drugs—for which average annual treatment costs can be 10, 15, or even 20 times higher than the average yearly costs of non-biologic drugs—is pricing millions of Americans out of the medications they need to treat life-threatening illnesses.
Biologic drugs are used to treat serious diseases, such as cancer, multiple sclerosis, anemia, and rheumatoid arthritis. Although most prescription drugs are created by combining inorganic materials, biologics are made from living organisms. Currently, unlike with traditional prescription drugs, the FDA has no approval process for the generic versions of biologic drugs. As a result, users of these often life-saving medications are forced to pay exorbitant amounts to treat their conditions, without any hope of competition from generic versions of the biologic drugs. As an example of the high prices, Epogen, a drug used to treat anemia, can cost as much as $10,000 per year.
While biologic drugs are increasingly common treatment options—they accounted for one out of every eight prescriptions filled in 2007—they remain very expensive, costing tens to hundreds of thousands of dollars each year. Under-insured and uninsured persons who are prescribed biologic treatments may find these treatments unaffordable and may forgo them completely. The astronomical cost of these drugs not only harms consumers, but also health-insurance payers, such as employers, private health care plans, and public programs such as Medicare and Medicaid. Without available generics as competition, biologics will continue to drive up the overall cost of health care. Overall, the costs of biologics are predicted to reach $99 billion by 2010, when they will account for 26 percent of total drug spending.
Patients who need biologic drugs tend to need the medicine for the rest of their lives to treat chronic illnesses. For many people with long-term conditions, a generic prescription drug option means having access to the medicine they need at a price they can afford.
AARP supports the Promoting Innovation and Access to Life-Saving Medicine Act (H.R. 1427/S. 726), which would create pathways—similar to that for traditional prescription drugs—for the approval of generic and comparable biologic drugs and for timely patent dispute resolution. The bill was introduced in the House of Representatives on March 11, 2009, by the Energy and Commerce Chairman Henry Waxman (D-Calif.) and cosponsored Reps. Nathan Deal (R-Ga.), Frank Pallone (D-N.J.), and Jo Ann Emerson (R-Mo.). The Senate bill was introduced on March 26, 2009, sponsored by Senator Charles Schumer (D-N.Y.) and cosponsored by Sens. Susan Collins (D-Maine), Sherrod Brown (D-Ohio), and David Vitter (R-La.).
AARP strongly supports the Promoting Innovation and Access to Life-Saving Medicine Act because it would give the FDA the authority to create a pathway for the approval of generic forms of biologic drugs, which are used to treat serious, usually chronic diseases, such as cancer, multiple sclerosis, and rheumatoid arthritis. AARP believes this legislation is critical to health care reform because it would lower prescription-drug prices and help to bring down the cost of health care for Americans of all generations.
AARP will push for passage of the Promoting Innovation and Access to Life-Saving Medicine Act in the 111th Congress, either as part of health care reform or as a stand-alone measure.