The Generic Pharmaceutical Association is pretty fond of Florida. The group has held its annual meeting in the state almost every year since the association was formed. But regardless of the weather or the hotel amenities, when GPhA convenes in Orlando next month, its members will be slightly disappointed in the venue: Florida is below the national average in the generic utilization rate for its Medicaid program.

The state is only 1% off the national Medicaid average of 68% (though still well below the overall national dispensing average of about 75% generic utilization) so Florida may not be a priority target for the association, but generic firms are hoping that every statehouse in the country gets the message that it needs to boost the use of generics in Medicaid.

"Our key message to the state governments is that increasing generic utilization is the only way you can save money," Paul Bisaro, chairman of GPhA's board of directors and CEO of Watson Pharmaceuticals Inc., said in an interview.

"In fact, it’s probably the only way you can not go bankrupt as more and more of the Medicaid requirements move from federal to state" under health care reform, Bisaro argued.

Paul Bisaro

In 2011, GPhA hopes to make – and win – more of these arguments in the states, and the association feels it is in a strong position because of its revived membership tally, restructured board and record-setting budget.

After a tumultuous year that saw the departure of the association's largest member and the resignation of its long-time president, GPhA has restructured, and "the association has come through this transition quite nicely," Bisaro said.

Teva is back (along with Apotex and Perrigo) and the association's operating budget now stands at around $9.5 million, about $2 million more than the association had to work with last year.

With the budget and membership census complete, the focus now turns to finding a new president for the association, but "we're in no rush to do that," Bisaro said, and it seems unlikely one would be tapped by the annual meeting, which is Feb. 16-18.

Former GPhA President Kathleen Jaeger – who now helms the National Community Pharmacists Association – left in June in the wake of Teva's departure and disappointment in the structure of the biosimilars approval pathway that was created in the health care reform law (Also see "GPhA After Jaeger: Will Industry Pressures Push Firms Together Or Pull Association Apart? New CEO Must Face Down FOBs" - Pink Sheet, 10 May, 2010.).

Since then, the generics association has been run by a tripartite team of VPs, with policy head Bob Billings taking the lead on day-to-day operations (Also see "GPhA Goes For Three: Billings To Head Tripartite Interim Leadership Team" - Pink Sheet, 22 June, 2010.).

But underscoring the continuing challenges GPhA faces, one leg of that interim stool is now leaving and the association must again rebuild its federal affairs shop as Senior VP for Government Affairs Bill Head departs for the Consumer Healthcare Products Association (Also see "CHPA Splits Roles Of Government Affairs VP, General Counsel And Secretary" - Pink Sheet, 10 January, 2011.).

And the association's reunification is not complete: Hospira has decided to remain on the outside (see sidebar, Also see "Hospira The Holdout" - Pink Sheet, 10 January, 2011.).

With those internal and external needs in mind, GPhA is seeking a president with lobbying experience but also someone who can sell the value of the restructured association to its membership as well.

For 2011, GPhA has gone to a bifurcated membership structure in which only manufacturers can be full members while others, such as suppliers and distributors, can be associate members (see chart, Also see "Return Of The New And Improved: GPhA's 2011 Membership List" - Pink Sheet, 10 January, 2011.).

The change is an effort to reflect the changed industry in which many generic firms have become international behemoths. As part of the restructuring, GPhA also cut the size of its board in half to 12 members so it can operate with more flexibility.

As a result, many firms that are now associate members are paying less than they did before, while regular members are mostly paying more. "By defining the dues structure the way we did and by generating more dues for the association, we can do more legislatively, both on the federal level and then also increasingly important, on the state level," Bisaro said.

The association is looking to hire staff and consultants to make its case about generic utilization, and after years of fighting legislation that would restrict automatic substitution of certain classes for drugs, such as anticonvulsants, the association is eager to be talking to state officials about implementing, not just stopping, something.

"We’ve got packets that we’re giving to the state legislators to show them what they can do to achieve higher utilization," Bisaro said. "So we’ve moved from being reactionary to being progressive."

With that progressive posture, GPhA is hoping to get many states out of the red as it tracks Medicaid substitution rates (see chart).

State-by-state Medicaid generic utilization rates

State-by-state Medicaid generic utilization rates

The association also wants to bring its "new sense of drive" to Washington policy debates, Bisaro noted, particularly:

negotiations with FDA over ANDA user fees
implimentation of the biosimilars approval pathway
ensuring firms retain a full range of patent settlement options

For ANDA user fees, the generics industry "is now as unified as it’s ever been around a set of proposals for user fees including application fees, facility fees and inspection fees," Bisaro said. Of course, "we recognize that the agency will have its own agenda when we get there."

As negotiations begin, "we’ll do our best to reconcile the two and see if we can come up with a program that works for the industry as well as the FDA. And I’m sure Congress will be involved in this process at some point," Bisaro said.

GPhA's embrace of facility and inspection fees suggests that a proposal from Mylan that had originally been a side note to the ANDA user fee debate will now be front and center (Also see "Generic User Fees: FDA Reaches Out To More Trade Groups; Plan Could Mix Inspection and Application Fees" - Pink Sheet, 3 January, 2011.).

Indeed, the performance metrics that GPhA wants to see in exchange for user fees "would include not just timings for application processes," Bisaro said, "but also making sure our applications aren’t held up for other ancillary reasons like, 'We haven’t inspected your facility in the last two years, therefore you can’t get the approval.'"

For patent settlements, Republican control of the House seems to preclude the possibility of any "pay-for-delay" legislation advancing, but the Federal Trade Commission is still considering rulemaking and litigation efforts to stop the deals (Also see "FTC Rulemaking Could Be Next (And Last?) Attempt To Curb "Pay-For-Delay"" - Pink Sheet, 6 December, 2010.).

While the bullet points on GPhA's 2011 Washington agenda so far focus mostly on working with the executive branch and not Capitol Hill, the association knows that a key to future success – say, when the patent reform debate returns – is meeting with Senators and Representatives.

To that end, the association has scrapped the policy conference it had been holding in the fall. "Rather than do a day-and-a-half or two-day meeting where you’re asking folks on the Hill to come and talk to us, the focus is to get as many of our CEOs into Washington as frequently as possible so that they can go to the Hill and talk to the policymakers one-on-one," Charlie Mayr, Watson senior VP for corporate affairs, said.

In place of the policy conference, the association will continue the reformatted CEO summit that helped kick-start the association's restructuring last fall (Also see "GPhA Reorganization Starts With Sales Pitch At CEO Summit" - Pink Sheet, 29 September, 2010.).

Tying that meeting to the final board meeting "works very, very well," for priority and budget setting, Bisaro said.

After navigating the restructuring of the association and asking for buy-in from members, Bisaro now faces a tough commitment question of his own – whether to run for another term as chairman.

"I have until February to make that decision," he said. But after all he's accomplished so far, Bisaro might just say, I'm going to Disney World.

By M. Nieslen Hobbs

GPhA Enters 2011 Bigger And Stronger, But With A Broader Fight On Its Hands

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