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Bush proposes rules to boost generic drugs

New regs designed to enforce 'original intent of a good law'

President Bush said the proposed regulations would cut the cost of prescription drugs by billions of dollars.
President Bush said the proposed regulations would cut the cost of prescription drugs by billions of dollars.

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U.S. President Bush proposed regulations that would make lower-cost generic drugs available to the public more quickly. CNNfn's Louise Schiavone reports (October 22)
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WASHINGTON (CNN) -- President Bush proposed regulations Monday that would make lower-cost generic drugs available to the public more quickly, limiting the ability of brand-name drug companies to delay their production.

"By this action, we'll reduce the cost of prescription drugs in America by billions of dollars and ease the financial burden for many citizens, especially our seniors," Bush said in the Rose Garden.

The Senate, by a wide margin, passed a measure tackling the same issue in July, and the head of the Senate's prescription drug task force said Monday that Bush's proposal falls well short of that Senate bill.

Bush said companies that create new drugs deserve to seek a profit on their work and are protected by patents, but that some companies have manipulated a legal loophole to delay the release of their drugs in generic form.

The 1984 Hatch-Waxman Act promotes competition in the drug industry, but a recent Federal Trade Commission study found that big drug companies are increasingly filing frivolous lawsuits and invoking the act to fend off competition and keep the cheaper generic drugs out of the market.

Under Hatch-Waxman, brand-name drug makers can receive up to 30 months of additional patent protection while their litigation proceeds. The FTC says some large drug manufacturers use the 30-month shield multiple times to stall the generic drugs for years.

The White House proposal would grant name-brand drug companies one 30-month stay only for each drug manufactured, thus blocking them from filing multiple patent-protection lawsuits and keeping the generic versions off the market.

In addition, some patents would no longer be entitled to protections like the 30-month stay, including those on packaging and other features that have little to do with innovations in drug therapy, the president said.

Bush said patent protections are a necessary incentive for companies to continue developing and marketing new drugs, a process that can cost as much as $800 million. The new White House proposal would not undermine the patent protections, but rather, enforce "the original intent of a good law," he said.

New drugs are under patent protections for an average of 11 years, Bush said, and in the next three years about 200 are set to expire.

Senate action

Sen. Debbie Stabenow, D-Michigan, head of the Senate's prescription drug task force, said Bush's proposal is "a small step in the right direction [but] the U.S. Senate has already taken action in a strong bipartisan manner on this issue."

The Senate bill, passed by a vote of 78-21, "would save American consumers twice as much as the administration's plan -- an estimated $60 billion instead of $30 billion over 10 years -- [and] would also allow for the re-importation of drugs from Canada," Stabenow said.

She said Bush should support the Senate-approved legislation as the way to reduce the cost of prescription drugs.

Sen. John McCain, R-Arizona, also urged the president to back the Senate legislation. He praised Bush's move as "long overdue recognition of the grave problem" and said he hopes the administration is "genuinely serious about the issue."

Prescription drug coverage is an important campaign issue this year, and with fewer than three weeks before the midterm elections, the White House is hoping to win the upper hand in the debate.

Last year, the average cost for a drug per person was $72 while the average cost of generic versions of the same drugs was less than $17.

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