Rule Change on Generic Drug Labeling Could Cost Billions


A proposed rule change for generic drug labels, crafted by the Food and Drug Administration, could cost patients, health care providers and drug manufacturers billions of dollars and limit access to affordable, prescription drugs for minorities and the poor, according to more than a dozen organizations that serve people of color.

Black groups and those representing other people of color expressed their concerns about the rule change in a March 14 letter to Margaret Hamburg, the commissioner of food and drugs for the United States Food and Drug Administration.

The letter said acknowledged that, “while great strides have been made around improving the health of racial and ethnic minority populations through the
development of health policies and programs that will help eliminate health disparities, much remains to be done.”

Among the groups signing the letter were: the National Medical Association, the National Dental Association, the National Black Nurses Foundation, the National Black Chamber of Commerce, the International Association of Black Professional Firefighters, the Association of Black Psychologists, the National Coalition on Black Civic Participation and the Southern Christian Leadership Conference.

The rule change is designed to allow generic drug makers the ability to update their drug labels as soon as they learn of new potential risks.

The letter stated, “[The proposed rule change] would not only jeopardize patient safety, but as a recent economic study has shown, would also create billions of dollars in annual increased costs for consumers, taxpayers, large and small businesses, and state and federal governments. The rule would decrease patient access, impede healthcare decisions and delivery, and make fewer generic drugs available for patients who need them most.”

Patients’ advocate groups and some health care providers worry that drugs that are scientifically identical will carry very different warning labels, adding to patient confusion and may cause some consumers to shun life-saving, generic drugs completely.

According to a report by Matrix Global Advisors, an economic policy consulting firm and sponsored by the Generic Pharmaceutical Association, a trade group for makers and distributors of generic prescription drugs, “the proposed Rule could be expected to increase spending on generic drugs by $4 billion per year (or 5.4 percent of generic retail prescription drug spending in 2012). Of this, government health programs would pay $1.5 billion, and private health insurance, $2.5 billion.”

In 2012, industry experts reported that generic drugs accounted for 84 percent of all prescriptions.

The report said that “generic manufacturers would face higher insurance premiums, self- insurance costs, and reserve spending on product liability, may exit or decline to enter the market for certain products for which they perceive greater liability risk or uninsurable liability risks.”

The report also warned that insurance companies that offered liability coverage to generic manufacturers in the past may also reverse course.

Rule Change on Generic Drug Labeling Could Cost Billions

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