New Act Would Allow Generic Drugs to Enter the Market Sooner

drug prices, Medicare, generics, CREATES Act

It’s no surprise that drug prices have become a big problem. 

The CREATES Act (Creating and Restoring Equal Access to Equivalent Samples Act of 2018) would stop drug companies from delaying cheaper generic versions of drugs from coming on the market. The legislation is sponsored by Senator Patrick Leahy (D-Vt.) and Judiciary Committee Chairman Chuck Grassley (R-Iowa).

What would the CREATES Act do?

The new act would allow developers of generic and biosimilar drugs to bring civil lawsuits against makers of brand-name drugs “if sufficient quantities of reference samples of a branded product are not made available for premarket testing.”

If enacted, the CREATES Act would make it possible for generic and biosimilar drugs to go on the market earlier than they currently do. Overall federal spending on prescription drugs would also be reduced, up to $3.3 billion from 2019 through 2028, and there would be increased revenues by $600 million over that same window of time. These numbers would lead to savings for consumers and private insurance companies as well.

Stopping anti-competitive behavior

Senator Grassley said of the bill: “Anti-competitive behavior by some brand-name pharmaceutical companies to block lower cost alternatives hurts consumers and costs taxpayers billions. The bipartisan CREATES Act is a free market solution that respects intellectual property rights and encourages greater competition that will inevitably lower the price of prescription medications for the American patient.”

Although the bill has strong bipartisan support, a vote has not happened due to intense lobbying by the pharmaceutical industry. Specifically, the Pharmaceutical Research and Manufacturers of America (PhRMA) spent $10 million lobbying against the CREATES Act in just the first quarter of 2018.

CBO gives its approval

Just last week, the Congressional Budget Office (CBO) gave its approval of the bill.

The legislation is cosponsored by Senate Judiciary Committee Ranking Member Dianne Feinstein (D-Calif.) and Judiciary Committee members, Senators Amy Klobuchar (D-Minn.), Mike Lee (R-Utah), Richard Blumenthal (D-Ct.), Sheldon Whitehouse (D-R.I.), Dick Durbin (D-Ill.), Ted Cruz (R-Texas), John Kennedy (R-La.) and Lindsey Graham (R-S.C.). 

The Act is up for vote in the Senate. Another version of the bill is also up for consideration in the House. Stay tuned to Medicare World for  the latest on this and other pending legislation that affects drug prices. 


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