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Wave of generic drugs could save billions, study finds

WASHINGTON—Consumers and health plans could save more than $26.4 billion over the next five years by using cheaper generic versions of 14 brand-name drugs that are scheduled to lose their patent protection by 2009, according to a study released Tuesday.

Copycat versions of those drugs, which older Americans commonly use, could help Medicare shave $23.3 billion off its prescription-drug spending over the same period, the study by the Pharmaceutical Care Management Association indicates.

The association's study looked at 14 of the top 100 drugs that older consumers use, including the cholesterol medications Zocor and Pravachol, heart disease medications Norvasc and Lotrel, mental health drugs Zoloft and Risperdal, the allergy medication Zyrtec and the hypertension drug Coreg. Seniors account for about 47 percent of sales for the drugs in the study.

A recent study by Consumers Union found that Medicare could save $8.2 billion, or 58 percent, in 2007 just by beneficiaries using cheaper generic statins to reduce cholesterol. Generic drugs typically are 60 percent cheaper than the original versions; the savings can run from 30 percent to 80 percent.

But the expected savings from the new wave of generics aren't guaranteed.

Drug companies have a variety of ways to delay or prevent generic competition for as long as possible because prices and market share for top-selling medications can fall by more than half once a generic competitor enters the market.

Mark Merritt, the president of the Pharmaceutical Care Management Association, said drug manufacturers could try to extend the expiring patent lives of certain medications, file additional patents on existing drugs, or file legal challenges to generic competitors, all in an effort to preserve sales and profits.

"This is not a slam dunk," Merritt said of the potential new generics. "There's an agenda to prevent generics getting to the market as fast as they could, and should any of these tactics prevail or proliferate it could be harmful to the cost-saving benefits."

A report in the current edition of Business Week said that Peter Dolan, the chief executive official of Bristol-Myers Squibb and the new chairman of the Pharmaceutical Research and Manufacturers of America, the leading trade group for drug manufacturers, would begin a legal push to extend drug-patent protections permanently.

Such patents typically run for 20 years, but the clock begins ticking when a new compound is discovered, not when it receives federal approval. That lag time can eat up more than half of a drug's patent period before it even hits the market.

Ken Johnson, a senior vice president for the Pharmaceutical Research and Manufacturers of America, said making sure that America's pharmaceutical research companies have adequate patent protection to sustain their innovation "is always a priority. We are not at this point developing any new policy or legislative initiatives. However, we will always fight to keep the pipeline of new drug discovery open."

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(c) 2006, Knight Ridder/Tribune Information Services.

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