Consumer Federation of California

Contact: Richard Holober / Brian Taylor

[CFC press release:] The nonprofit advocacy organization Consumer Federation of California (CFC) is calling on the U.S. Food and Drug Administration (FDA) to save American consumers three billion dollars a year by ending a  bottleneck that is keeping affordable, generic versions of the acid reflux medicine Nexium off the market.

CFC’s Aug. 1 filing supports a Citizen Petition submitted to the FDA May 5, which seeks a final decision on an application to market a generic version of Nexium (active ingredient: esomeprazole magnesium). Drug maker AstraZenica brought Nexium to the U.S. market in 2001 under a number of patents that were set to expire beginning in 2007.

Ranbaxy Laboratories Inc. sought FDA approval for a generic version of Nexium in 2005. After thorough review, the agency gave preliminary approval for Ranbaxy to bring its generic alternative to market – and, following normal procedure, it included a 180-day exclusive right to market a generic alternative to Nexium beginning April 8, 2008.

On that very day, however, Ranbaxy and AstraZenica entered numerous business agreements, according to the Citizen Petition. Among the details, Ranbaxy agreed to keep its exclusive generic substitute for Nexium off the market until May 27, 2014. That agreement is like money in the bank for AstraZenica, which racked up some $6 billion in domestic Nexium sales in 2013, according to industry figures. Meanwhile, Ranbaxy benefited from supplier agreements with its rival and other considerations.

“May 27, 2014 has come and gone,” CFC’s filing states, but “no generic esomeprazole product has entered the market. Consumers remain bereft of the benefit of cost-saving generic drugs until full generic entry into this market.” According to the General Accounting Office, consumers can save as much as 75 percent by purchasing generics instead of brand name medicines. A 50 percent price reduction for a generic substitute for Nexium could save California consumers and health insurance payers $375 million a year; nationwide savings could exceed $3 billion.

“It is time for the FDA to either approve Ranbaxy’s generic version or allow other pharmaceutical companies to bring a generic alternative to market,” said CFC Executive Director Richard Holober. “Americans deserve access to lower-cost, safe and effective alternatives to Nexium.”

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Since 1960, the nonprofit Consumer Federation of California has been a powerful voice for consumer rights.