The national outcry over escalating drug prices has rather swiftly turned into the stuff of legislation as, in the election year, elected officials are demonstrating their concerns over the unseemly price hikes.

Case in point: the CREATES Act. The acronym stands for Creating and Restoring Equal Access to Equivalent Samples — in this case, an acronym that says what the bill actually is.

As reported by Modern Healthcare, this bill with bipartisan Congressional support and consumer group/labor union backing would force brand-name drug companies to play nicer with the makers of generics. The prices of many generics has spiked of late, the cause of much of the complaining about drug prices. The generic makers claim much of the blame can be placed on the brand-name makers and the barriers they have erected to quickly releasing generic versions once patents expire.

The generic makers are represented by the Generic Pharmaceutical Association, which includes the CREATES Act in its strategy for reducing generic price spikes.

The act addresses two major “roadblocks” to generic release that the association says leads to unusual price increases: Brand-name makers refuse to share sufficient samples of drugs with the generics to permit expedited generic development; and many drugs require a distribution safety protocol that brand-name makers haven’t been willing to share with generic makers, effectively shutting them out of the generic market for such drugs.

Big Pharma is, not surprisingly, opposed to the act. It cites as its reason the opening of the safety protocol to generic makers as a safety risk to consumers.

However, as Modern Healthcare reports, generic makers must bear much of the blame for increases in their drugs.

Referencing a recent Journal of the American Medical Association article, it notes that generic prices were essentially stable for seven years before generic makers announced increases of 1,000 percent and more for some 400 drugs. The article argues that developmental costs don’t generally translate into higher drug prices, as the CREATES Act implies. Say the authors: “Although prices are often justified by the high cost of drug development, there is no evidence of an association between research and development costs and prices; rather, prescription drugs are priced in the United States primarily on the basis of what the market will bear.”

What to do about such increases? Say the JAMA authors: “The most realistic short-term strategies to address high prices include enforcing more stringent requirements for the award and extension of exclusivity rights; enhancing competition by ensuring timely generic drug availability; providing greater opportunities for meaningful price negotiation by governmental payers; generating more evidence about comparative cost-effectiveness of therapeutic alternatives; and more effectively educating patients, prescribers, payers, and policy makers about these choices.”

It doesn’t sound like the CREATES Act addresses most of these scholarly solutions. So, in effect, the Generic Pharmaceutical Association's endorsement of the CREATES Act could be seen as taking the offensive move to back a bill that blames brand makers for generic price spikes to take the eye of the public off their own membership’s role in those increases.

Instant Insights /

Drugmakers react to legislation easing path for generics

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