Health Biz: Generics key to cost control

WASHINGTON, May 19 (UPI) -- A U.S. House subcommittee heard this week how an increase in generic drug usage would help patients and the healthcare sector save money. Lawmakers are looking for ways to increase competition between generics and more expensive brand-name drugs.

"A 1 percent increase in generic (drug) utilization would result in nearly $4 billion in savings for consumers," Kathleen Jaeger, president of the Generic Pharmaceutical Association, testified before the House Energy and Commerce Subcommittee on Health.

A December 2004 report by the Department of Health and Human Services found that if consumers bought generic products whenever possible, $17 billion could be saved. Both Democrats and Republicans on the subcommittee agreed utilizing generic drugs is important in reducing healthcare spending, and suggested bipartisan legislation could provide incentives for patients to use generic drugs.

Dr. Scott Gottlieb, senior fellow at the conservative American Enterprise Institute, said as a physician he has gained a deep appreciation of generic drugs. When he prescribed, he said he needed to keep in mind not only what was best for the patient but also what the patient could afford.

"Generic drugs make it possible for me to provide my patients with the lifesaving benefits of safe and effective medicines, while staying within their tight budgets," Gottlieb said.

Generic drugs are less expensive than brands because as copies, they do not pass on as much research and development cost to consumers.

Dr. Jan Berger, chief clinical officer of Caremark Rx Inc. said the No. 1 reason why patients do not take their medicine is because it is too expensive. The flip side is that physicians often do not know the retail price of the drugs they prescribe.

Gottlieb said Aetna has helped the educational aspect with a Web site that allows patients to mix and match similar medications to see how they could lower their overall drug bill. He also advocated widespread adoption of e-prescribing by physicians.

Patents and patent extensions on brand name drugs pose a major problem in increasing the use of generics. The BioShield II Act of 2005 allows pharmaceutical companies to receive patent extensions on brand drugs to retain a market monopoly longer in an effort to help drugmakers recoup an estimated billion-dollar price tag for developing for each new medication.

"Drugmakers are currently pushing for a second BioShield bill that provides the industry an array of patent extensions," Rep. Sherrod Brown, D-Ohio said. "Even I didn't expect the drug industry to sink so low as to exploit the threat of terrorism in pursuit of windfall profits."

Jaeger said the bill does contain promising incentives, such as liability protections, fast track Food and Drug Administration review of drug applications, and extended tax incentives.

NEW HEALTH INSURANCE DATABASE

The National Association of Health Underwriters has launched an online database to provide information about available health insurance options.

"The goal is for the public to go in the database and find information to get the coverage they need," said Janet Trautwein, NAHU vice president of government affairs.

She said many people do not know the health insurance options available to them so NAHU decided one solution was the Health Care Coverage Options Database, which is free for users. The Web site is split into four categories: employer based, individual health coverage, public sector programs, and health coverage contacts.

The database also is useful for legislators who need to compare programs in a state-by-state analysis. The database is available at nahu.org/consumer/healthcare.

FDA DRUG SAFETY OVERSIGHT BOARD

The Food and Drug Administration is forging ahead with its Drug Safety Oversight Board, even though bills are working their way through Congress to create a more independent body to watch over post-approval prescription drugs.

The DSB will report to the director of FDA's Center for Drug Evaluation and Research, but some in Congress feel the body should be more independent of the agency that approved the drug in the first place.

FDA said the DSB includes 15 scientists appointed from throughout FDA and other government agencies.

Dr. Susan K. Cummins was appointed DSB executive director.

PHYSICIAN PAYMENT UPDATE

Sens. Jon Kyl, R-Ariz., and Debbie Stabenow, D-Mich., Thursday introduced the "Preserving Patient Access of Physicians Act of 2005" in an attempt to fix problems in Medicare's fomula for paying physicians.

The Medicare Payment Advisory Committee had recommended a 2.7 percent increase in payments for 2006. In 2007 the increase would be based on the Medicare Economic Index for Input Price Changes and Productivity Increases -- which in today's dollars would amount to about 2.6 percent. The cost of the bill is estimated at between $25 billion and $35 billion over five years.

MedPac has recommended changing the long-term payment formula because it is tied to the Gross Domestic Product and fluctuates unpredictably. Kyl added that the issue will ultimately require the "attention of the full Senate."

The bill got the immediate support of the American Medical Association, given physicians currently are slated for 26 percent in payment reductions over six years beginning in 2006.

AMA Board Chairman Dr. J. James Rohack said in a statement: "Physicians want to serve America's seniors, but they simply cannot afford to accept an unlimited number of new Medicare patients into their practices if Medicare payments do not keep up with the cost of providing care."

An AMA survey found 38 percent of doctors will decrease the number of new Medicare patients they accept if the first Medicare payment cut scheduled takes place Jan. 1. The 2006 cut would reduce Medicare payments to 16 percent below the government's measure of inflation in the cost of running a physician office.

H.R. 2356 is the companion bill in the House.

STEM CELL VOTE COMING SOON IN HOUSE

A bill that would expand the number of embryonic stem cell lines eligible for federally funded research is expected to hit the full House next week. It is co-sponsored by Rep. Diana DeGette, D-Colo., and Rep. Mike Castle, R-Del.

Scientists have said existing embryonic stem cell lines allowed for research under President Bush's 2001 stem cell policy likely are contaminated and unusable. Research on stem cells has declined in the United States since the Bush policy was announced -- with more scientists overseas doing the work in countries where cell lines are more readily available.

Critics oppose embryonic stem cell research because it requires the destruction of the embryo, which they consider a human life.

House Minority Leader Rep. Nancy Pelosi, D-Calif., said she looks forward to voting on the bill, which has almost 200 co-sponsors.

"I've been involved in this fight myself for over a decade," Pelosi told reporters Thursday. "And I believe that this bill is going to be a very important one. It'll enable science to answer the prayers of America's families for cures for diseases that their families confront or accidents that they have had."

Pelosi said Democrats will vote overwhelming for the bill and she hoped there would be enough Republicans willing to change sides and put it over the top.

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UPI Intern Andrew Damstedt contributed to his report. E-mail ebeck@upi.com