Monday, October 28, 2002
Volume 38, Issue 43; ISSN: 0511-4187
Remarks on prescription drugs
George W Bush
� October 21, 2002
� The President. Good morning. For more than a year, the Federal
Trade Commission has investigated delays and abuses in the process
of bringing generic drugs to the market. I have reviewed the FTC
findings, and I am taking immediate action to ensure that lower
any improper delays. By this action, we will reduce the cost of
prescription drugs in America by billions of dollars and ease a
financial burden for many citizens, especially our seniors.
� I appreciate so very much the Secretary of the Department of Health
and Human Services, Tommy Thompson, for his good, steady, and hard
work on this issue.
� Secretary Thompson. Thank you, Mr. President.
� The President. I want to thank Les Crawford, who is the Deputy
Commissioner of the FDA, who so ably led this agency for the last
year. I appreciate your hard work, Les. And I'm proud, also, that
Mark McClellan is with us, who is the newly confirmed FDA
Commissioner. Mark has been on my staff with the Council of Economic
Advisers, and he will soon take over the FDA to work with Les to
make sure the policy I'm announcing is fully implemented.
� We live in an age of miracle drugs. Millions of Americans and
citizens from many other lands, for that matter, have found healing
drugs allow children with rheumatoid arthritis to walk and to go to
school. New drugs shrink cancerous tumors, and they control the
advance of HIV, slow the progression of multiple sclerosis. In the
treatment of many diseases, major surgery has been replaced by a
single pill. And this has been a special blessing to many Americans,
particularly our seniors, who are living longer and better lives.
� As a nation, we are committed to encouraging the promise of new
miracle drugs in two different ways. First, we recognize innovators
must be able to be financially rewarded for their creativity and
hard work so they will continue investing and researching, putting
new resources and talents in the creation of new drugs. Every time
we hope for a cure or a breakthrough, we're counting on the success
of a researcher and the success of a drug company. Second, we want
these breakthroughs to become affordable and widely available, Both
of these goals, innovation and accessibility, are essential; both
� In America, one of the ways we reward innovation is by granting a
patent. If you take a risk and you make an investment and succeed,
the right to profit if you can. A new drug can cost as much as $800
million to develop and bring to the market. Without patent
protection, few would take such a risk, few would be willing to
invest. With patent protection, America's brand-name drug companies
have become the greatest in the world, and health care systems
around the world depend on American innovations they could not
� Patents, of course, expire after a number of years, and this is one
of the ways we are able to make drugs more accessible. After the
patent expires, other companies are free to offer the drug in
generic form at far lower prices. Last year, the average brand-name
drug cost more than $72 per prescription. The average price for
generic drugs, which are just as safe and effective as the brandname
drugs, was less than $17 per prescription. Generic drugs make
America health care far more affordable.
� Current Federal law and regulations attempt to carefully balance
the goals of innovation and accessibility. New drugs, on average,
are sold for 11 years under patent protection, then generic versions
� The FTC investigation discovered that some brand-name drug
manufacturers may have manipulated the law to delay the approval of
competing generic drugs. When a drug patent is about to expire, one
method some companies use is to file a brand new patent based on a
minor feature, such as the color of the pill bottle or a specific
combination of ingredients unrelated to the drug's effectiveness. In
this way, the brand-name company buys time through repeated delays
called automatic stays that freeze the status quo as the legal
complexities are sorted out.
� In the meantime, the lower cost generic drug is shut out of the
market. These delays have gone on, in some cases, for 37 months or
53 months or 65 months. This is not how Congress intended the law to
work. Today I'm taking action to close the loopholes, to promote
fair competition, and to reduce the cost of prescription drugs in
� The Food and Drug Administration is issuing a proposed rule that
move that in many cases will reduce the public's wait for generic
drugs by years. Some patents will no longer be entitled to
protections like the 30-month stay, including patents on packaging
and others that have little or nothing to do with valuable
innovation and drug therapy.
� These steps we take today will not undermine patent protection.
Instead, we are enforcing the original intent of a good law. Our
message to brand-name manufacturers is clear: You deserve the fair
rewards of your research and development; you do not have the right
to keep generic drugs off the market for frivolous reasons.
� Over the next 3 years, about 200 drug patents are set to expire. By
cutting out delays and maneuvering, our reforms will yield cost
savings of more than $3 billion a year. Those savings will come to
employer health plans, to State Medicaid programs, and to seniors
when they buy medicines on their own.
� This is another important advance in the cause of bringing
affordable prescription drugs to our seniors. Already, we have
more seniors with modest means through our Medicaid Pharmacy Plus
Program. We're working to provide seniors on Medicare with drug
cards that provide discounts from drug manufacturers on brand-name
drugs, like the ones available in private health plans. And we will
not rest until we've reformed and strengthened the Medicare program,
itself, so that a prescription drug benefit is available to every
senior in America.
� The House of Representatives took strong action in passing
legislation to improve Medicare. The Senate failed to act. The
challenge of health care reform is to increase access to quality
care, while we preserve the finest health care system in the world.
� I thank the good people at the FTC and the FDA for helping in this
effort and for working to make these critical drugs more affordable
for every American.
� Thank you for coming.