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Gatt Could Keep Drug Prices Higher

Fri., April 28, 1995, midnight

Americans may wind up paying an additional $6 billion for their medicines because of an oversight in the new world trade agreement that extends the patents of brand-name drugs, a senator asserted Thursday.

Pharmaceutical giants are battling consumer groups and generic competitors before the Food and Drug Administration to determine whether they’ll get the windfall.

At issue is whether GATT, the General Agreement on Tariffs and Trade, will keep low-cost, generic drugs from competing with more than 100 brand-name versions as quickly as generic companies and consumers had anticipated.

“What’s going to happen is we’re seeing American consumers paying … higher drug prices for a much longer period of time,” said Sen. David Pryor, D-Ark., who, with five other senators, urged the FDA on Thursday to side with the generic industry.

When GATT goes into effect in June, all new patents will last 20 years. Current U.S. law says patents last just 17 years. GATT also allows the life of some current patents to be extended to 20 years.

In medicine, that means 109 brand-name drugs could each get up to three more years of sales without generic competition. For example, the patent on the world’s top-selling drug, the ulcer medication Zantac, was set to expire in December, but manufacturer Glaxo Inc. says GATT now protects Zantac until July 1997.

A University of Minnesota study says Americans will pay $6 billion more for these drugs during the next 20 years than they would have paid had generics been allowed for sale under the pre-GATT schedule.

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