Generic Pharmaceutical Association (GPhA) Urges Administration to Consider Patient Risk Implications of Proposed Rule on Labeling

New Analysis Shows Change Would Add $4B to Annual Health Care Cost; Rule Would Create Dangerous Confusion Throughout Drug Supply Chain, GPhA Warns

WASHINGTON, Feb. 5, 2014 /PRNewswire-USNewswire/ -- The Food and Drug Administration's (FDA's) Proposed Rule on prescription drug labeling would add $4 billion annually to the nation's already high health care costs, undercutting the cost savings that generic medicines have brought to America's patients and health care system, according to an analysis released today by economic consulting firm Matrix Global Advisors (MGA). 

"Flooding the marketplace with multiple versions of labels for the same medicines would not only seriously jeopardize patient safety, but also would burden consumers, taxpayers, large and small businesses, and state and federal governments with billions of dollars in increased costs for generic medicines," said Ralph G. Neas, President and CEO of the Generic Pharmaceutical Association (GPhA). "The study demonstrates that in proposing this Rule, the FDA overlooked its very real financial impact on the affordability and availability of generic medications for patients and all stakeholders in the drug supply chain."

Of the projected increase in health care costs, MGA estimates that Medicare and other government programs will incur $1.5 billion in annual new spending, while private insurers and patients will pay $2.5 billion per year. 

• Yearly Increased Cost to
  Government Health Programs:
  $1.5 Billion

• Yearly Increased Cost to
  Private Health Insurance:
  $2.5 Billion

The Proposed Rule would expose generic drug manufacturers to substantial new tort liability costs, which in turn would require them to adjust prices to stay in business, withdraw products, or decline to launch new affordable versions of brand medicines, the report cautions. Increased liability also would accrue to pharmacists, physicians and the other principal participants in the health care system, beyond the substantial confusion for all stakeholders, impeding health care decisions and delivery.

"New labeling regulations should protect patients, facilitate care, and reduce costs," said Neas.  "Unfortunately, the Proposed Rule does none of these things—the unintended consequences of this rule would be nothing short of catastrophic. The FDA and others need to take a hard look at the potential harmful impact on patient access and national health care costs of a Proposed Rule that changes 30 years of law requiring generic and brand medicines to have the same labels, and permits for the first time labeling changes for generic drugs without FDA approval. 

A sensible solution is within reach. At this critical juncture, we call on the FDA to work with all stakeholders and identify a course of action that does not put patient safety or patient savings at risk." 

Resources:
Matrix Global Advisors (MGA) report: FDA's Proposed Generic Drug Labeling Rule: An Economic Assessment

GPhA Overview and Assessment: Food and Drug Administration's Proposed Rule Supplemental Applications Proposing Labeling Changes for Approved Drugs and Biological Products

About GPhA
GPhA represents the manufacturers and distributors of finished generic pharmaceuticals, manufacturers and distributors of bulk pharmaceutical chemicals, and suppliers of other goods and services to the generic industry. Generic pharmaceuticals fill 84 percent of the prescriptions dispensed in the U.S. but consume just 27 percent of the total drug spending, saving the health system nearly $200 billion annually. Additional information is available at www.gphaonline.org. Follow us on twitter: @gpha.

Contact: Steve Arnoff, 202.249.7113

SOURCE GPhA