Generic drugmakers criticise US health plan rebates

Home/Policies & Legislation | Posted 20/10/2009 post-comment0 Post your comment

The US government could save more money by increasing the use of cheaper generic drugs rather than hiking rebates paid by manufacturers, an industry executive said on 17 September 2009.


A healthcare reform plan proposed by Senate Finance Committee Chairman Max Baucus, unveiled on 16 September 2009, would raise the rebates generic drugmakers must pay to the government on medicines used by patients in the Medicaid health programme for the poor. The changes are meant to help pay for an overhaul of the US healthcare system and wider insurance coverage.

“There is bigger money out there,” Mr William Marth, North American CEO for Teva Pharmaceutical Industries Ltd, said about the rebates.

“The bigger money is really increasing generic utilisation to at least the same levels that exist in nongovernmental use of medicines,” Mr Marth told reporters at a meeting of the Generic Pharmaceutical Association (GPhA).

Mr Marth said about 70% of prescriptions dispensed in the US are filled with generic drugs, which are cheaper copies of brand-name medicines. For the state-federal Medicaid programme, the rate is 64%.

For each 1% increase in generic use, Medicaid could save US$315 million (Euros 215.39 million) annually, Mr Marth said. By comparison, the increased rebates would save an estimated US$46 million (Euros 31.45 million) a year, Teva officials said.

The Senate Finance Committee will vote next week on the plan and how to pay for the estimated US$856 billion (Euros 585.30 billion) cost over 10 years. The committee's final product will be merged with a measure passed by the Senate health panel. Each chamber of Congress will take up a version of the healthcare bill in the coming weeks.

GPhA said in a statement that the higher rebates proposed by Mr Baucus “could have the unintended consequence of also increasing the costs of generics for consumers and the government” by weakening competition.

“Adding costs to generic drugs is simply not worth the risk of reducing competition in the markets that generate these tremendous savings,” the group said.

Reuters 17 September 2009. Generic drugmakers criticize U.S. health plan rebates.

Source: Reuters

comment icon Comments (0)
Post your comment
Related content
PDUFA VI: FDA could promote generics competition
47 MD001813
Home/Policies & Legislation Posted 29/07/2022
House bill passes FDA funding fees but conflicts with Senate bill
User Fee V13H23
Home/Policies & Legislation Posted 15/07/2022
US Senate clarifies status of interchangeable biosimilar exclusivity
Interchangeability V18K30
Home/Policies & Legislation Posted 27/05/2022
Nomenclature of biologicals and biosimilars in Peru
02 AA010638
Home/Policies & Legislation Posted 20/05/2022
Most viewed articles
About GaBI
Home/About GaBI Posted 06/08/2009
EU guidelines for biosimilars
EMA logo 1 V13C15
Home/Guidelines Posted 08/10/2010