Just Saying No

Not every pharmaceutical company struck a deal with President Obama on health reform.

Generic drugmakers are balking at a plan to help pay for the president's reform, Kaiser Health News reports.

The generic makers would pay $460 million over a decade through rebates to Medicaid as part of the health reform bill that passed the Senate Finance Committee this week. Every major health industry is being asked to pony up some money to fund reform.

The amount that would be extracted from generic makers is a pittance compared with the $80 billion that big, brand-name drugmakers would pay in the same time period under the same bill.

But that doesn't matter to a group representing the generic companies, such as Teva Pharmaceutical Industries. The rebates will discourage companies from making generics, the leader of a trade group says.

"That would be very harmful to our industry and our consumers," Kathleen Jaeger, CEO of the Generic Pharmaceutical Industry Association, tells Kaiser News.

Generic drug companies aren't happy about other aspects of the Democrats' health reform. In particular, House and Senate bills give brand-name biotech drugs 12 years of patent protection before generic versions can be sold.

But the bottom line is generics are sold for pennies on the dollar, compared with the much pricier brand-name products, Jaeger says, and she doesn't think the companies that make these cheaper medicines should foot the bill. They're already doing their part to reduce costs in the health care system.