Proposed Legislation Intended to Help Generic Drug Makers Compete

The Centers for Disease Control and Prevention, or CDC, says that deaths from drug overdoses – prescription painkillers – have “more than tripled since 1990,” according to this policy impact report. In this context, prescription painkillers are a serious problem. But painkillers aren’t the only dangerous drugs on the market. Birth control drugs, diabetes drugs, and cholesterol-lowering drugs are three types of potentially dangerous medications that also come to mind.

These drugs are also expensive. Brand name drug makers prefer it that way, for obvious reasons, but the inability for generic drug makers to effectively compete in the marketplace harms U.S. consumers.

REMS as a Restraint on Competition

Risk Evaluation and Mitigation Strategies, or REMS, are comprehensive guidelines for how a drug should be prescribed and its effects monitored (as part of federal legislation enacted in 2007). REMS’ goal was apparently to improve patient safety – which is likely true enough, but as Alexander Gaffney points out on the Regulatory Focus blog, REMS also restrict competition.

Why? Because makers of brand name drugs use REMS as leverage to prevent generic drug makers from accessing those drugs and bringing generic versions to market. Now, as Gaffney reports, the FDA is making it easier to bring generic copies of dangerous drugs to the market.

Why Make It Easier to Make Cheaper Copies of Dangerous Drugs?

The obvious question is why would we want to make it easier for drugmakers to bring generic copies of dangerous drugs to market? The answer lies partly in why we might want access to generic drugs at all: It’s at least $5 billion for U.S. consumers every year in greater costs associated with the lack of competition.

Fast Generics Act of 2014

Enter the FAST Generics Act of 2014, which is currently set before the House of Representatives. The proposed law would expand, among other things, generic drug makers’ ability to compete, and make some in-roads on brand-name makers’ ability to restrict competition.

In other words, it would mitigate somewhat REMS’ restrictions on competition.

Where Might This Legislation (Or Efforts Like It) Lead?

Important here is the idea that when generic drug companies are allowed to compete, their efforts at reverse-engineering brand name drugs will eventually result in improvements to those medications, because brand name makers must keep innovating. This is an issue that goes beyond how much U.S. consumers might save, and goes directly to the safety of drugs patients rely on to maintain or improve their health.

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