Sens. John McCain and Charles E. Schumer on Tuesday began an effort to pass a bill that would help open the prescription drug business to generic manufacturers, a move they said would cut costs to patients by 60 percent.
The Arizona Republican teamed with the New York Democrat to break a congressional deadlock over how to expand prescription drug benefits to senior citizens using Medicare.
Their legislation would appropriate no money. Instead, they would make drugs less expensive through a change in long-standing federal regulations.
The chief feature of their bill would undercut the automatic 30-month delay granted by the Food & Drug Administration to manufacturers of brand-name drugs who challenge a generic manufacturer's patent challenge.
Replacing the 30-month wait, the McCain-Schumer bill would empower manufacturers of generic drugs to go to court immediately to seek a declaratory judgment -- or judge's order -- on the validity of the brand name patent.
If the judge threw out the brand-name drugmaker's patent claim, the generic company could begin to make and market the drug right away.
Schumer said lawyers for brand-name drugmakers have been free to file "frivolous patent challenges to stop a generic's approval in its tracks."
The senators said a 1984 law creating a market for generics has "been seriously undermined by patent law loopholes that have let brand-name drugmakers use a host of tactics -- including colluding with generic-drug manufacturers -- to delay the approval of lower-cost alternatives by several years."
These abuses, they said, have created monopolies and rising prices.
In 1990, the average cost of a brand-name drug was $27.16, and $10.29 for the generic. By 2000, the price for the brand name had risen to $65.29, and for the generic to $19.33.
Soaring drug prices are driving up health insurance premiums. Some estimates predict that premiums will increase between 10 percent and 15 percent next year. Prescription prices are expected to rise 20 percent this year, compared to 18 percent in 2000 and 17 percent in 1999.
Republicans and Democrats are far apart on the shape of the Medicare prescription drug reform. The White House would set aside $153 billion over 10 years to help defray the cost of prescriptions for the poorest elderly. Schumer has estimated the Republican plan would cover only 30 percent of those on Medicare.
Democrats want to spend $400 billion over a decade to begin a drug benefit for all those on Medicare. The Congressional Budget Office estimates the true cost of a universal benefit would be $1.5 trillion.
The McCain-Schumer bill has been endorsed by Ford Motor Co., U.S. Public Interest Research Group, Blue Cross Blue Shield Association, Kaiser Permanente, the Health Insurance Association of America and other organizations.