Pharmaceutical innovators should be praised for curing diseases thought to be fatal or untreatable even fifty years ago. Although a patent runs 20 years after the original application is made, presuming it is not extended by the U.S. Food and Drug Administration for some reason, it takes between 10 and 15 years for a new drug to reach the market at a cost of $2.6 billion. Patents provide brand name producers a generous period to recoup investment and make a profit.
After patent expiration, competition within the industry between brand name innovators and manufacturers of generics should produce a reduction in price that benefits consumers. Unfortunately, industry lobbyists and lawyers manipulating regulatory schemes have found ways to keep that from happening. The bi-partisan CREATES Act is a targeted approach to mitigate this problem. It would speed up generic drug applications after branded product patent expiration and rein in the ability of innovators to game existing regulations to protect patent monopolies beyond their shelf life.
The CREATES Act — the acronym stands for Creating and Restoring Equal Access to Equivalent Samples — has the support of prominent House and Senate Republicans and Democrats including Freedom Caucus Chair Rep. Mark Meadows (R-NC), Vermont anti-corporate liberal Rep. Pete Welch, California Senator Dianne Feinstein (D-CA) and Libertarian Sen. Rand Paul (R-KY). It fits well with President Donald Trump’s call for lowering drug prices, with progress already being demonstrated as the FDA recently announced a record approval of 1,027 cost-saving generic drugs in 2017 after sensible agency-level changes were made to its regulatory burdens.
Due to lower pricing structures, generic drugs deliver higher utilization in patient populations. The FDA requires generics to strictly maintain the same high quality as branded drugs and calculates generics typically save patients a whopping 85 percent. This is lifesaving, particularly in low income or elderly populations. The CREATES Act should be an easy sell, except for some lobbyist murmuring aimed at keeping conservatives from getting on board by suggesting that enacting CREATES will lead to a proliferation of the RU486 abortion pill.
China, where killing baby girls in utero is a common practice, had the ignominious distinction of being the first country to approve the drug in 1988 and it was approved in the U.S. in 2000. Since it appeared on the scene here more than 25 years ago, pro-life and family groups have done a magnificent job fighting RU486 distribution and educating women on its dangers.
Even approved, it was the third rail of the industry. A company was created just to manufacture it. That company, Danco Laboratories, still hides behind an unlisted number and a post office box.
RU486 is contraindicated for women who smoke, are over 35, under 18, or who suffer common medical conditions. It can only be administered in medical offices and requires three visits. It produces severe pain and hemorrhage and can result in uterine rupture and sepsis. Most importantly, it remains available only under the most intense regulatory scrutiny allowed by the FDA.
The CREATES Act does nothing to change the way FDA handles RU486 safety requirements and its dispensing methods will not change. The suggestion that FDA will change its treatment is a red-herring intended to keep conservatives from backing the bill. This is a specious argument at its core, as it is highly doubtful that generic manufacturers will line up to produce RU486 given all the expense and complications associated with its manufacture and use.
Is the mysterious manufacturer of the abortion pill spreading fear among those who oppose it to maintain a monopoly? It’s at least as possible as any of the other farfetched scenarios developed by isolated self-interests and rent seekers trying to preserve monopolies and crush competition.
Whatever the motivation, the real sin would be to deny cost-cutting new medications to the Americans who need them most and give credence to disputes intended to do nothing more than extend a monopoly after the life of a patent has expired.
Kerri Toloczko is a Senior Policy Fellow at Institute for Liberty, a public policy organization dedicated to limited government, free enterprise and individual pursuit of the American dream.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.