Big Pharma Skyrockets Prices By Opposing Generic Drug Reform

David A. Ridenour President, National Center for Public Policy Research
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Big Pharma claims a generic drug reform bill now before Congress would allow unsafe drugs onto the market.

But the legislation, the Creating and Restoring Equal Access to Equivalent Samples Act, or CREATES Act, wouldn’t do anything to lower safety standards. It would merely create mechanisms to force brand name drug producers to comply with existing regulations they’ve routinely flouted.

By opposing the measure, it’s Big Pharma – not generic drug manufacturers – that is endangering public safety.

Big Pharma would have us believe the CREATES Acts would rush generics to market without adequate testing. For that to be true, current generic regulation would also have to be inadequate, too. There’s little evidence to support that.

As the American College of Physicians put it, “Most of the peer-reviewed evidence… [shows] generic drugs are as effective as their brand-name counterparts.” And the wide use of these medications also attests to their safety – 86% of all prescriptions today are filled with generic drugs.

There’s at least one safety risk that shouldn’t be in dispute: When people stop taking their medications as prescribed, they place their health – and sometimes their lives – at risk.

Close to 60% of all American adults take at least one medication. Of these, 8% – or about 12 million people – don’t take their medications because they can’t afford them.

You can blame Big Pharma for that.

The problem isn’t patents. It’s that brand name companies manipulate FDA regulations to maintain their monopolies long after their patents expire. One mechanism for this is the Abbreviated New Drug Application (ANDA) that was ostensibly created to speed the pace of generic introduction.

An ANDA allows a generic producer to skip over the FDA’s ordinary approval process for a new drug, including expensive clinical trials, by demonstrating the ingredients in its drug are “bioequivalent,” or the same as those in the FDA-approved drug with which it plans to compete. It doesn’t make the drug any less safe.

Requiring drugs with the same ingredients to jump through the same hoops would be like buying two DNA tests from Ancestry.com for twins. You can do it, but it’s wasteful and – well – stupid.

To prove bioequivalence, the FDA requires the generic producer obtain a sample of the brand name drug for lab testing. The trouble is, brand name manufacturers routinely deny the samples to prevent generic companies from completing their ANDA applications. This allows them to keep their monopolies longer and set prices as they see fit.

This is one of the main drivers of drug inflation, which hit 12% on annualized basis this past December – 100 times the rate of overall inflation.

Celgene is one of the companies that’s played this game. When generic drugmaker Mylan requested samples of Rivlimid – a drug used to treat multiple mylenoma – Celgene refused. Free from competition, the annual cost of Rivlimid is $194,000. Another is the now infamous Turing Pharmeceuticals. It denied generic producers samples of its AIDS drug Daraprim and was able to jack up its price by 5,000% overnight.

The CREATES Act would remedy this problem by allowing generic companies to gain injunctive relief when denied samples.

Big Pharma also unfairly blocks competition by refusing to share Risk Evaluation and Mitigation Strategies (REMS). REMS are written procedures beyond ordinary labeling that the FDA requires for drugs it deems higher risk to ensure that their benefits outweigh the risks. A generic drug must be covered by a REMS if its brand name counterpart has one. Not only that, but it must negotiate with the brand name company to share a REMS.

By sharing REMS, Congress sought to speed generic approvals, promote cost-sharing and make REMS more user-friendly. Through shared REMS, physicians and pharmacies may access data about a drug by all its different names through a single source.

But the brand names haven’t cooperated on REMS either. By one estimate, Big Pharma’s abuse of the REMS process alone adds $5.4 billion to health care costs every year.

The CREATES Act would help by giving the FDA greater flexibility to waive the shared REMS requirement. Generics would still be required to have REMS subject to the same rigorous FDA safety reviews as other companies. Big Pharma would just no longer be in the driver’s seat.

The CREATES Act would increase competition, lower drug costs, spur innovation and – most importantly – allow more people to stay on their medications.

Self-interested Big Pharma is asking us: Who are you going to trust, your own lying eyes or us?

I’ll trust my eyes.

David A. Ridenour is president of The National Center for Public Policy Research, a non-partisan, non-profit educational foundation based in Washington, DC

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller