WASHINGTON — To lower drug costs and spur research, Sen. Orrin Hatch said he favors reforming a trail-blazing 1984 law he wrote to govern the "generic drug" industry.
But the Utah Republican said he will stop reform efforts if Democrats use it to try "piling on the pharmaceutical industry," which he says has become an unfortunately easy political target because of high medicine costs.
The 1984 "Hatch-Waxman" law allowed generic-drug companies to win approval for their lower-cost copycat products without duplicating years of research already conducted by "pioneer" research drug firms.
In return, "pioneer" companies were given up to an extra five years of exclusivity for their drugs — to make up for patent-exclusivity time lost during lengthy review periods by the Food and Drug Administration before the drugs could be marketed.
Hatch said refinements are now needed, even though he says the bill "saves consumers $8 billion to $10 billion annually" by allowing competition by generic-drug producers while still giving incentives to "pioneer" companies to develop new drugs.
He said in a speech Wednesday to the Federalist Society, a group of conservative lawyers, that one problem is research companies may not have enough exclusivity guaranteed for new drugs to encourage research.
"Some studies indicate that it can take between 12 to 15 years and over $500 million to launch a major new drug," he said. "You must remember that for every successful new drug product that actually reaches the market, there are about 5,000 candidates that fall by the wayside."
He said research companies want one day of patent exclusivity restored for each day they lose waiting for FDA approval — instead of just five years maximum.
Hatch said generic companies, meanwhile, would like to close some loopholes that have allowed some research drug companies to drag out exclusivity, stifle competition and keep costs of some drugs high.
"Let's be honest. Even those of us who are die-hard free marketeers have a hard time explaining to constituents why drugs are so expensive," he said. "Seniors especially do not understand why their medications can sometimes cost nearly as much a month as their rent."
Hatch said he is willing to help broker a compromise between generic and research drug companies "if there is interest in developing a balanced bill where consumers will benefit from both the most innovative medicines and be able to afford their current medicines."
But he warned, "I am not interested in seeking the short-term political gain that might come from the populist politics of piling on the pharmaceutical industry, nor am I interested in providing the vehicle for that to happen."