Metformin pills move through a sorting machine at a Laurus Labs pharmaceutical plant in Visakhapatnam, India. (Photographer: Sara Hylton/Bloomberg)

Make Drugs Cheaper by Encouraging Generics

(The Bloomberg View) -- FDA Commissioner Scott Gottlieb says he’s not looking to shame brand-name drug companies into providing generic drugmakers with the samples they need to create copies. It’s hard to see what else he has in mind by publishing a list of companies that generics makers say aren’t playing ball.

If pushing the big pharmaceutical companies to allow more competition from generics is indeed his goal, it’s a good one. Getting generic medicines to market faster could go a long way toward lowering exorbitant drug prices in the U.S. But whether Gottlieb’s effort to shine daylight on the companies’ “shenanigans,” as he puts it, will work is an open question.

It would be more effective to empower generics makers to sue brand-name drug makers who resist or delay selling them the thousands of samples they need to create and test copies. Bipartisan legislation to do just that has been stalled in Congress, opposed by the powerful pharmaceutical lobby.

Now, in the wake of President Donald Trump’s recent promise to boost competition in the drug market and Gottlieb’s efforts on generics, Speaker Paul Ryan says a revised version of the bill may soon move forward in the House. He and Senate Majority Leader Mitch McConnell should see that the legislation is passed without delay.

Brand-name drugs are expensive because they are monopolies, protected from competition by the Food and Drug Administration and the U.S. Patent Office for anywhere from eight to more than 15 years. A 2016 Harvard Medical School study found that this is the No. 1 reason drug spending has risen so much in the U.S. — by 164 percent from 2008 to 2015. Brand-name drugs represent one in 10 prescriptions but account for about three-fourths of total drug spending in the U.S., according to generics makers.  

Generic competition consistently pushes drug prices down. When at least two generic forms of a medicine come on the market, the price falls almost in half. When there are 10 generics, it drops to one-fourth the original brand-name price.

Slowing the creation of generic drugs is not the only way that big drug companies endeavor to extend their brand-name monopolies. But it is one that lawmakers can readily address by ensuring that generics makers can create copies at the earliest possible opportunity.

©2018 Bloomberg L.P.

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