NEWSROOM

June 25, 2008

CBO: Biogenerics Would Save Federal Government $6.6 Billion Over Ten Years

Creation of Clear Regulatory Pathway Would Also Lower Total

Expenditures for Biologics by $25 Billion over Ten Years

 

(Washington, DC)— The Congressional Budget Office (CBO) today released a cost analysis finding that the creation of an abbreviated pathway for follow-on biologics—or biogenerics—would save the federal government $6.6 billion over ten years and lower total expenditures for biologics by $25 billion over the same time period.

“For a quarter century, generic versions of chemical drugs have saved consumers and payors billions of dollars.  Now, CBO has confirmed that giving FDA additional authority to approve generic versions of biologics will save billions more,” said PCMA President and CEO Mark Merritt.  “Even greater savings would be available if Congress simply applied to biologics the Hatch-Waxman standards that are currently used to approve generics for chemical compounds.  It would be helpful if some provisions in the bill—such as ‘evergreening’—which unnecessarily delay the entry of biogenerics were reconsidered.  CBO acknowledges that the ‘evergreening’ issue will present significant problems beyond the ten-year scoring window.”

 

CBO estimates that:

 

  • Enacting S. 1695 would reduce total expenditures on biologics in the United States by $25 billion over the 2009- 2018 period.

 

  • Enacting the bill would reduce budget deficits (or increase surpluses) by a total of $6.6 billion over the 2009-2018 period.

Unlike conventional drugs, there is no clear regulatory process where biogenerics can be approved by the FDA.  PCMA was joined by a number of influential consumer, employer, and insurer groups who endorsed the “Access to Life Saving Medicine Act of 2007,” bipartisan legislation that seeks to create a clear regulatory pathway for biogenerics. 

 

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PCMA is the national association representing America’s pharmacy benefit managers (PBMs), which administer prescription drug plans for more than 210 million Americans with health coverage provided through Fortune 500 employers, health insurance plans, labor unions, and Medicare Part D.