WASHINGTON- U.S. Senator Herb Kohl (D-WI), Ranking Member of the Special Committee on Aging, today held a hearing to examine the bureaucratic and legal barriers that stop new generic drugs from entering the market. Generic medicines offer affordable alternatives to pricier name-brand drugs, reducing the financial burden on both senior citizens and the government health programs that serve them.

"The pharmaceutical industry remains one of the most profitable industries in the world, returning more that 15% on their investment," Kohl said. "But they are charging Americans the highest drug prices in the world, forcing some employers to drop health coverage for their employees and squeezing the budgets of state and federal governments."

At the hearing, Kohl questioned Gary Buehler, Director of the FDA's Office of Generic Drugs, on his department's efforts to address the growing generic application backlog in the face of mounting drug applications, frivolous citizen petitions, and significant budget cuts. Earlier this year, Kohl successfully added $10 million to FDA's budget to expedite generic drug review in the Senate's FY 2007 Agriculture Appropriations bill.

Kohl also cited "payoff settlements" as another obstacle that keeps generics off pharmacy shelves. Payoff settlements occur when a brand name drug company pays a generic drug maker to delay the sale of their competing generic drug. Last month, Kohl introduced legislation, the Preserve Access to Affordable Generics Act, to prohibit this anti-competitive scheme.

The Congressional Budget Office has estimated that generics save consumers between $8 and $10 billion each year at retail pharmacies. The use of generic drugs in hospitals provides savings of additional billions of dollars.

Kohl added: "We have to do more to bring these affordable medicines to the market. They will help individuals cope with soaring health care costs and help the federal government save money in Medicare and Medicaid."

Kohl is also the senior Democrat on the Agriculture Appropriations Subcommittee, which has jurisdiction over the FDA's budget.