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PHARMACEUTICAL TRADE ORGANIZATION FIGHTS MARYLAND TAX PROPOSAL

 PHARMACEUTICAL TRADE ORGANIZATION FIGHTS MARYLAND TAX PROPOSAL
 NEW YORK, May 1 /PRNewswire/ -- The National Association of Pharmaceutical Manufacturers (NAPM), the nation's oldest and largest association of manufacturers of generic pharmaceutical products, has voiced opposition to bill S.B. 740, which was recently proposed by the Maryland Senate Finance Committee, it was announced today.
 In a letter sent to all members of the Maryland legislature, NAPM Chairman Michael K. Reicher said, "I suggest that such a law |to levy a 15 percent tax on generic drugs sold in Maryland~ would be unfair and result in the poor and elderly of your state paying more for necessary drug products."
 Generic drugs, he said, are provided to the consumer at prices greatly lower than those of brand-name drugs because promotional costs are minimal, profits are low, and there is inter-generic competition. Generics manufacturers already rebate 10 percent of the cost of the drugs used by the Medicaid program to the state of Maryland. To add a 15 percent surcharge to an industry already focused on keeping costs down would, he noted, represent a burden that undoubtedly would be passed on to the consumer. Reicher concluded by saying that generic drug companies "would have no option but to include the price of the proposed tax, and the cost of implementing it, in the final cost of the product in Maryland (that is, an increase of about 20 percent)."
 NAPM also questioned the intent of the bill. It is directed only to generic drug manufacturers, who are providing medications at a cost savings to the general public. On the other hand, the manufacturers of much more expensive brand-name drugs would be unaffected by the new statute.
 The absence of generic competition to high priced brand-name drugs, said Reicher, "would clearly be hardest felt by the segment of the public least able to afford it and most in need of lower priced generic alternatives -- the poor and elderly."
 NAPM's letter to the legislators addressed the issues related to the bill point by point. It noted that brand-name drugs receive a long period of patent protected market monopoly. Only after this monopolistic period has expired, usually after 17 years, can generic drug manufacturers enter the marketplace, providing alternatives often 60 percent lower in price.
 Reicher took note of the fact that Federal Congressional leaders are currently studying the pricing practices of high priced brand-name drug companies, making it all the more difficult to understand why the state of Maryland seeks to penalize the makers of low priced generic drugs.
 -0- 5/1/92
 /CONTACT: Michael K. Reicher, chairman, or Robert S. Milanese, president of the National Association of Pharmaceutical Manufacturers, 212-838-3720/ CO: National Association of Pharmaceutical Manufacturers ST: Maryland IN: MTC SU:


TS -- NY011 -- 5311 05/01/92 08:55 EDT
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Date:May 1, 1992
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