The national outcry over escalating drug prices hasrather swiftly turned into the stuff of legislation as, in theelection year, elected officials are demonstrating their concernsover the unseemly price hikes.

|

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

|

As reported by Modern Healthcare, this bill with bipartisanCongressional support and consumer group/labor union backing wouldforce brand-name drug companies to play nicer with the makers ofgenerics. The prices of many generics hasspiked of late, the cause of much of the complaining about drug prices. The genericmakers claim much of the blame can be placed on the brand-namemakers and the barriers they have erected to quickly releasinggeneric versions once patents expire.

|

The generic makers are represented by the Generic PharmaceuticalAssociation, which includes the CREATES Act in its strategy forreducing generic price spikes.

|

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

|

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

|

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

|

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

|

What to do about such increases? Say the JAMA authors: “The mostrealistic short-term strategies to address high prices includeenforcing more stringent requirements for the award and extensionof exclusivity rights; enhancing competition by ensuring timelygeneric drug availability; providing greater opportunities formeaningful price negotiation by governmental payers; generatingmore evidence about comparative cost-effectiveness of therapeuticalternatives; and more effectively educating patients, prescribers,payers, and policy makers about these choices.”

|

It doesn’t sound like the CREATES Act addresses most of thesescholarly solutions. So, in effect, the Generic PharmaceuticalAssociation's endorsement of the CREATES Act could be seen astaking the offensive move to back a bill that blames brand makersfor generic price spikes to take the eye of the public off theirown membership’s role in those increases.

Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.

  • Critical BenefitsPRO information including cutting edge post-reform success strategies, access to educational webcasts and videos, resources from industry leaders, and informative Newsletters.
  • Exclusive discounts on ALM, BenefitsPRO magazine and BenefitsPRO.com events
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Dan Cook

Dan Cook is a journalist and communications consultant based in Portland, OR. During his journalism career he has been a reporter and editor for a variety of media companies, including American Lawyer Media, BusinessWeek, Newhouse Newspapers, Knight-Ridder, Time Inc., and Reuters. He specializes in health care and insurance related coverage for BenefitsPRO.