CalPERS Calls on Members of the U.S. House of Representatives to Preserve Access to Safe, Affordable Generics.

WASHINGTON -- Congress needs to introduce competition into the biopharmaceutical marketplace by giving the Food and Drug Administration (FDA) authority to approve safe biogenerics, a trustee of the nation's third largest health care purchaser urged today.

Priya Mathur, Vice-Chair of the California Public Employees' Retirement System (CalPERS) Health Benefits Committee, called on members of the U.S. House of Representatives to support legislation that opens the door to biogeneric competition.

Testifying before the U.S. House of Representatives Committee on Government Oversight and Reform, Mathur stated that CalPERS' spending for biotech products is distressingly substantial and rising at a rate that is significantly higher than traditional pharmaceuticals. On average, spending for biotech products was at least $55 per day - compared to traditional drugs at only $2 per day.

"At a time when our state is trying to expand health insurance to more Californians, slow the rate of growth in health care costs, and make our health care system more efficient, the high cost of biopharmaceutical products presents an unsustainable challenge to CalPERS and our entire health care system," said Mathur. "CalPERS supports providing the FDA with full discretion to make the ultimate decision about whether and when any prescription drug product - be it brand or generic - comes to market."

CalPERS spends nearly $5 billion annually on health benefits - or $13.4 million per day - for 1.2 million active and retired state and local government public employers and their family members. Of that amount, CalPERS - for the first time - will spend over $1 billion on its members' prescription drugs.

Mathur told the Committee that CalPERS has enjoyed tremendous success in controlling prescription drug costs through the use of generics, and attributes that success to the 1984 Hatch-Waxman Act. The Hatch-Waxman Act gave the FDA authority to provide an abbreviated approval process for those products deemed equivalent to an innovator product once a product's patent had expired.

"Without generic substitution, we estimate that our costs would be about 60 percent higher," said Mathur. "Generics save our enrollees and our State taxpayers hundreds of millions of dollars annually."

A copy of Priya Mathur's full remarks before the Committee can be found in the press room of CalPERS Web site at www.calpers.ca.gov.

CalPERS is the nation's third largest purchaser of health benefits after the federal government and General Motors, providing health benefits to more than 1.2 million State and public agency employees, retirees, and their dependents. For more information, please visit www.calpers.ca.gov.