Generic drug manufacturers are warning that Democrats’ new drug pricing legislation could have a devastating impact on the generic drug market.
Advocates are concerned that a provision in the $740 billion reconciliation package passed by Senate Democrats Sunday, allowing Medicare to negotiate drug prices directly with pharmaceutical companies, would undermine competition and long-term cost savings in the market provided by generics, according to Axios.
(1/4) Oppose #InflationReductionAct!
On behalf of the hundreds of millions of American patients who rely on cost savings from safe, affordable generic and biosimilar medicines, the Association for Accessible Medicines (AAM) strongly opposes the Inflation Reduction Act … pic.twitter.com/6JIIkuINrT
— AAM (@AccessibleMeds) August 6, 2022
“The bottom line is that it’s competition that works,” CEO for the Association of Accessible Medicines Dan Leonard told Axios. “At the end of the day there will be less competition if this legislation goes into effect.”
Craig Burton, executive director of the Biosimilars Council, told Axios the legislation “potentially sets up a series of perpetual monopolies for the brand products, where sure, they’re going to make less than they would under price controls, but they’re going to make a whole lot more than they would from competition.”
Scott Gottlieb and Benedic Ippolito, senior fellows for health policy at the American Enterprise Institute, also echoed these concerns, writing in an article that there will be less generics entering the market, and that they may do so later, due to the price cap policy. (RELATED: One-In-Five Gay Men Who Got Monkeypox Had Sex With 10 Or More People Before Getting Infected, CDC Says)
The landmark healthcare legislation is being met with skepticism in other aspects on top of price increases. The Congressional Budget Office (CBO) found the policy which caps price increases on drugs at the rate of inflation, would cause pharmaceutical companies to simply increase launch costs on new drugs.
The Senate parliamentarian also ruled recently that Democrats could not include a provision to cap the price of insulin at $35 to be passed through budget reconciliation, according to The New York Times.