I don’t know about you, but the headlines on pharmaceutical companies substantially raising prices over a short period of time (without good reason) appear far too often for my taste – and we write about drug pricing issues frequently on this blog. But a quieter game of drug company manipulation has been taking place at the same time.
Once a new prescription drug passes the FDA approval process the pharmaceutical company receives a patent, essentially giving the manufacturer a monopoly on all rights to that drug for 20 years. Then the patent expires, ideally ushering in a wave of competition from other drug manufacturers and effectively pushing the price lower to the benefit of the public. Sadly, it is no surprise to me that brand name drug manufacturers come up with strategies to delay competitors from entering their market.
The Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act, a bipartisan bill currently in the Senate, attempts to address one of the most prevalent tactics being used today; the brand name drug manufacturer refuses to sell their drug to the competitor (which needs the drug to conduct bioequivalence testing, so it can safely replicate it for generic use) by twisting FDA safety requirements.
Brand name manufacturers often defend their actions by pointing to failures generic manufacturers have experienced when trying to replicate, which I think in some circumstances appears to be a valid argument. But when you consider other strategies used by brand name manufacturers to delay competitors from entering their market (such as “pay-for-delay” agreements and “citizen” petitions – topics for another blog, and creating long-release formulas which we mentioned recently), their intention from the outside perspective appears to be profit over public wellbeing.
The CREATES Act would allow the generic drug manufacturer to sue the brand manufacturer, compelling it into providing samples of the drug. If the act can pass Congress, it will hopefully start a trend towards competitive drug pricing that could positively impact the overall cost of healthcare, and by extension your health insurance premiums. Stay tuned.