Administration's Inadequate Funding For FDA's Office Of Generic Drugs Is "Penny-wise And Pound Foolish," Says GPhA

The Generic Pharmaceutical Association (GPhA) today
expressed extreme disappointment over the Bush Administration FY 2007
budget's inadequate funding for the Office of Generic Drugs (OGD), an
agency within the Food and Drug Administration (FDA) that is responsible
for the review and approval of affordable generic medicines. Generics
save consumers and public and private health care purchasers billions of
dollars each year, and OGD's scarce funds could substantially delay
consumers' timely access to these affordable medicines.


"The Administration's budget proposal is penny-wise and pound foolish,"
said GPhA President and CEO Kathleen Jaeger. "Generic medicines provide
billions of dollars in savings to state and federal programs, employers,
insurers and consumers. This budget proposal jeopardizes those savings.


"Instead, the Administration should realize that the return on
investment from increased OGD accountability and de minimus funding-even
in the amount of $15 million-would pay substantial and long-lasting
dividends for all Americans. For example, additional OGD funding could
yield tremendous financial benefits for several of the Administration's
health care priorities, such as Medicare, Medicaid and programs to
improve children's health care, assist the chronically ill, and fight
AIDS," Jaeger added. "Delaying access to affordable generics, whether
it's days, months or years, hurts the health of this nation."


Because generics cost 30 percent to 80 percent less than brands, generic
medicines stretch scarce health care dollars while providing the same
medicine and same results. A one percent increase in generic utilization
nationwide could save the United States $4 billion dollars annually.


In the FY 2007 budget, OGD is flat-funded at best, even though its
workload has increased by a staggering 36 percent. OGD currently has a
backlog of more than 800 generic drug applications, a number that will
only grow as more than $100 billion in brand products are expected to
lose patent protection by 2010.


In fact, this is the third fiscal year in a row that OGD's budget has
been flat-funded. Although funding for OGD was increased slightly in FY
2003, the funds were not expressly earmarked for specific day-to-day
operations on generic applications. As a result, most of the funds went
to other agency initiatives. This year, FDA has further reduced the
budgets for generic drug research contracts and information processing
modernization for the generic drug program.


"It's outrageous to learn that one of OGD's two FY 2007 performance
goals is to reduce the approval time for generic drugs by a mere two
weeks for the top 25 percent of generic applications. And it's even more
outrageous that FDA projects an increase in the median review time to
17.5 months for all other generic applications," said Jaeger. "Sadly,
FDA believes that streamlining the review process is the answer. Yet,
FDA fails to realize that over the years, OGD and the generic industry
have worked successfully on collaborative efforts to streamline the
approval process for generic drugs. And, we now have reached a
saturation point on administrative efficiency.


"GPhA appreciates OGD's previous efforts to streamline the review
process, including staff working overtime. Without additional OGD
funding and agency accountability, however, Americans will continue to
be denied timely access to affordable medicine.


"We certainly agree with the Administration's budget reference about the
need to eliminate unintended loopholes in bringing cost-effective
generic drugs to the marketplace. However, it is deeply disappointing
that this year's lack of investment in OGD undermines the very goal the
Bush Administration rightly extols," Jaeger concluded.


GphA represents the manufacturers and distributors of finished generic
pharmaceuticals, manufacturers and distributors of bulk active
pharmaceutical chemicals, and suppliers of other goods and services to
the generic drug industry. Generics represent 53% of the total
prescriptions dispensed in the United States, but less than 12% of all
dollars spent on prescription drugs. For more information about the
generic industry, visit gphaonline.


FDA's budget is available at

fda/oc/oms/ofm/budget/documentation.htm.

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