The generic-drug industry, responding to public anger over big price hikes for some generic products, is calling for action on a bipartisan Senate bill it says would increase the number of cheaper generic drugs and reduce U.S. drug spending.
Meanwhile, broader congressional efforts are building to hold both generic and brand-name drug manufacturers accountable for price spikes. Drugmakers would have to justify price hikes of 10% or more and disclose the information behind those pricing decisions under a separate bipartisan Senate bill called the Fair Drug Pricing Act.
In addition, the bipartisan Preserve Access to Affordable Generics Act, just introduced in the Senate, would make it illegal for brand-name manufacturers to use so-called pay-for-delay agreements with generic companies to keep competing generic products off the market.
The Generic Pharmaceutical Association, as part of a five-point plan it is touting at a Monday morning news conference, is promoting the Creating and Restoring Equal Access to Equivalent Samples Act, which is says would stop brand-name companies from blocking or delaying generic-drug development. Its co-sponsors include Republican Sens. Charles Grassley and John McCain and Democratic Sens. Patrick Leahy and Amy Klobuchar.
The CREATES Act targets two forms of anticompetitive behavior allegedly used by some brand manufacturers to stifle development of generic and biosimilar products, according to a letter of support from groups representing insurers, pharmacy managers, group purchasing organizations, labor unions, and consumers. One is refusing to provide adequate samples to generic companies to allow them to develop products and gain approval from the Food and Drug Administration.
The second involves brand-name manufacturers whose products require a distribution safety protocol known as Risk Evaluation and Mitigation Strategies refusing to allow generic competitors to participate in that protocol. The bill would set a deadline for brand-name producers to provide samples, and would give brand-generic companies new legal redress.
GPhA's effort reflects a schism in the drug industry between generic and brand-name producers, as both sectors react nervously to growing pressure from the public and politicians to address the affordability of drug costs. The CREATES bill is opposed by the larger and more powerful Pharmaceutical Research and Manufacturers of America, which represents brand-name drug producers.
“Risk Evaluation and Mitigation Strategies are a critical regulatory tool for protecting patient safety,” and PhRMA opposes the Creates Act because “it could jeopardize patient safety,” a PhRMA spokesman said.
Independent experts argue that easing the market entry of more generic products could put downward pressure on prices and costs, including in the case of EpiPen, whose manufacturer raised the price of the generic product by 550% over eight years. A 2014 analysis by Matrix Global Advisors found that practices by brand-name producers to deny manufacturers of generics and biosimilars access to product samples and safety protocols costs the U.S. healthcare system $5.4 billion a year, including $1.8 billion to the federal government.
But critics say generic producers are part of the problem, too. While the prices of most generic products were stable from 2008 to 2015, prices for nearly 400 products, or 2% of those sampled, soared by more than 1,000%, according to a recent JAMA article on reforming the prescription drug market. Skyrocketing prices for generic products such as EpiPen, pyrimethamine, and colchicine have contributed to the public perception that there's a crisis in prescription drug affordability.
“Maintaining a vigorous generic-drug market is key to lower prices,” said Dr. Aaron Kesselheim of Harvard Medical School, the lead author of the JAMA article.
Democratic presidential candidate Hillary Clinton recently proposed to establish an unprecedented federal review process to determine if price increases for long-established prescription drugs are justified. When the increases were deemed unjustified, the government could buy and provide alternative therapies to patients, allow temporary importation of lower-priced drugs from foreign countries, and fine drug companies that excessively raised prices.
But some experts doubt Congress will act any time soon on drug costs, given the complexities of the issue, the sharp ideological disagreements, and the powerful stakeholders pitted against each other.
“Government shoots with a blunderbuss and that blunderbuss will have all kinds of unintended consequences,” said Chip Kahn, CEO of the Federation of American Hospitals, whose group is working the Campaign for Sustainable Rx Pricing, a coalition seeking market-based solutions.