US FTC says "there continue to be competitive problems in pharma market"

Testifying on behalf of the Federal Trade Commission before the US Senate's Special Committee on Aging, Commissioner Jon Leibowitz described the FTC's work in the area of branded and generic pharmaceutical competition and discussed barriers that can lead to the delay of generic entry into the US marketplace. Despite Congress' "remarkable record of success" in working to ensure that consumers gain access to generic drugs as quickly as possible," he said, "there have been, and continue to be, competitive problems in pharmaceutical markets."

Opening with a discussion of drug prices, the testimony noted that "pharmaceutical expenditures are a concern not only to individual consumers, but also to government payers, private health plans and employers. Generic drugs play an important role in containing rising prescription drug costs, by offering consumers therapeutically identical alternatives to brand-name drugs, at a significantly reduced cost." To address the cost issue, Congress passed the Hatch-Waxman Amendments to the Food, Drug and Cosmetic Act in 1984, establishing a regulatory framework that sought to balance innovation by research-based drug companies with opportunities for entry by generic drug manufacturers. Under Hatch-Waxman, the Congressional Budget Office estimated that consumers saved between $8.0 billion and $10.0 billion on retail drug purchases in 1994 alone.

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