Warren WaPo Opinion: "It’s time to let the government manufacture generic drugs"

[Deleted member 4198]

https://wapo.st/2EAFXF0

Forty-seven states and the Justice Department are investigating a price-fixing conspiracy that's driving up the cost of generic drugs in the United States. One investigator called it "most likely the largest cartel in the history of the United States ." This crisis calls for action. That is why I'm introducing legislation to authorize the public manufacture of generic drugs wherever drug companies have warped markets to drive up prices.

Drug companies use the "free market" as a shield against any effort to reduce prices for families. But they're not operating in a free market; they're operating in a market that's rigged to line their pockets and limit competition. The entire pharmaceutical industry in reality runs on government-granted monopolies, mostly in the form of long-term patent protections.

Click to shrink...

The Affordable Drug Manufacturing Act would allow the Department of Health and Human Services to step in where the market has failed. HHS would manufacture or contract for the manufacture of generic drugs in cases in which no company is manufacturing a drug, when only one or two companies manufacture a drug and its price has spiked, when the drug is in shortage, or when a medicine listed as essential by the World Health Organization faces limited competition and high prices.

Public manufacturing will be used to fix markets, not replace them. The Affordable Drug Manufacturing Act would allow the government to manufacture generic drugs at lower costs or contract with manufacturers to produce the drugs at competitive prices. And if a potential manufacturer thinks it can do better, the bill provides that the license to manufacture the drug is continually offered for sale, with the only condition being that the buyer would agree to keep selling the product to consumers at competitive prices.

Sound radical? It isn't. The federal government already contracts with private manufacturers to produce stockpiles of drugs critical to protecting and treating Americans in the event of a biological, chemical or nuclear attack. My proposal would use similar tools to address the public health crisis resulting from unaffordable medicines.

Click to shrink...

More in the full article.

Background reading:
Investigation of generic 'cartel' expands to 300 drugs
https://wapo.st/2rrKD7F

Spoiler

derail in 1... 2... 3...

 

[Drifters_]

You're telling me to trust the government more now huh? That's an interesting perspective.

 

[ahoyhoy]

Damn straight. If it's not cost effective for a company to manufacture niche but life saving drugs, the government should step in. Rather than paying companies to make the drug, just make the drugs yourself.

 

[Hollywood Duo]

I agree in theory but in reality it'll just get bid back out to the same companies. Might as well just go hard on regulation.

 

[Goldenroad]

Why not let the free market make generic drugs like in Canada? That way there is no price-fixing. The more competition the better for consumers.

EDIT: To expand on this. I think the government should help fund R&D for these companies, but once a viable cure has been established, it should not be able to be patented.

 

[Metallix87]

Sorry if I'm ignorant on the matter, but isn't the rising cost driven by government intervention in the first place? The HMO Act of 1973 was what caused this, by essentially turning healthcare into a for-profit enterprise, as far as I'm aware.

 

[Deleted member 4198]

Why not let the free market make generic drugs like in Canada? That way there is no price-fixing. The more competition the better for consumers.

EDIT: To expand on this. I think the government should help fund R&D for these companies, but once a viable cure has been established, it should not be able to be patented.

Click to shrink...

The generics companies are allegedly engaged in a price fixing conspiracy, as per the second link in OP:

What started as an antitrust lawsuitbrought by states over just two drugs in 2016 has exploded into an investigation of alleged price-fixing involving at least 16 companies and 300 drugs, Joseph Nielsen, an assistant attorney general and antitrust investigator in Connecticut who has been a leading force in the probe, said in an interview. His comments in an interview with The Washington Post represent the first public disclosure of the dramatically expanded scale of the investigation.

Click to shrink...

The alleged collusion transformed a cutthroat, highly competitive business into one where sudden, coordinated price spikes on identical generic drugs became almost routine. Competing executives were so chummy they had an alphabetical rotation for who picked up the tab at their regular dinners, according to a person familiar with the investigation who spoke on the condition of anonymity because the case remains under investigation.

Click to shrink...

 

[Window]

Why not let the free market make generic drugs like in Canada? That way there is no price-fixing. The more competition the better for consumers.

EDIT: To expand on this. I think the government should help fund R&D for these companies, but once a viable cure has been established, it should not be able to be patented.

Click to shrink...

You should read the article. It's quite informative. The US already allows private companies to produce generic drugs. Problem is that it's turned into a huge cartel rife with collusion and price fixing. The suggestion here is to have the government intervene as a manufacturer to restore competition in markets for drugs where it sees potential for more competitive prices because it's been difficult to do that through other legal means.

 

[onadesertedisland]

Wouldn't this be prudent, not only for citizens, but also for the military?

 

[Razgriz417]

Wouldn't this be prudent, not only for citizens, but also for the military?

Click to shrink...

and the gov (and tax payers) as well as they're overcharging with their price fixing. Essentially our tax dollars going straight into the pocket of this cartel

 

[Goldenroad]

You should read the article. It's quite informative. The US already allows private companies to produce generic drugs. Problem is that it's turned into a huge cartel rife with collusion and price fixing. The suggestion here is to have the government intervene as a manufacturer to restore competition in markets for drugs where it sees potential for more competitive prices because it's been difficult to do that through other legal means.

Click to shrink...

Put in harsh penalties, including business-ending fines, and losing their license to produce drugs, if they are caught price fixing. It's called regulation. It just seems like if the government can't even do the simple job of regulation, how good do you think they are going to be at production and distribution?

 

[Rand a. Thor]

There definitely needs to be a fix for medicine prices. I searched for the prices of my asthma medicines, and its ridiculous that post prescription prices from basic insurance are nearly 200$ in the states monthly while here its like 20-25€ max. That's 1/10th of an income at best for my profession compared to 1/20th in the worst case scenario.

 

[PlanetSmasher]

I agree with this. Pharma is a monumentally scummy industry that cannot be trusted to self regulate. They will just keep fucking us over and over again until the government breaks their backs.

 

[Takamura-San]

This should've been done ages ago. I welcome this change.

 

[Window]

Put in harsh penalties, including business-ending fines, and losing their license to produce drugs, if they are caught price fixing. It's called regulation. It just seems like if the government can't even do the simple job of regulation, how good do you think they are going to be at production and distribution?

Click to shrink...

This is not meant to be a replacement to legal actions but complementary. It's targeted specifically at drugs with no to low number of manufacturers.

Again from the article:

The Affordable Drug Manufacturing Act would allow the Department of Health and Human Services to step in where the market has failed. HHS would manufacture or contract for the manufacture of generic drugs in cases in which no company is manufacturing a drug, when only one or two companies manufacture a drug and its price has spiked, when the drug is in shortage, or when a medicine listed as essential by the World Health Organization faces limited competition and high prices.

Public manufacturing will be used to fix markets, not replace them. The Affordable Drug Manufacturing Act would allow the government to manufacture generic drugs at lower costs or contract with manufacturers to produce the drugs at competitive prices. And if a potential manufacturer thinks it can do better, the bill provides that the license to manufacture the drug is continually offered for sale, with the only condition being that the buyer would agree to keep selling the product to consumers at competitive prices.

Click to shrink...

You might argue then that the limited number of manufacturers is reflective of the high cost of manufacturing relative to demand but there's other factors at play which determine number of players in a market.

 

[Operations]

Sounds cumbersome, the problem exists but should be addressable with regulation. Is there precedent for this for a high income economy?

 

[bane833]

You're telling me to trust the government more now huh? That's an interesting perspective.

Click to shrink...

You can at least influence the government. You can do fuck all about private corporations.

 

[PlanetSmasher]

You can at least influence the government. You can do fuck all about private corporations.

Click to shrink...

Especially when they own total or de facto monopolies on the product they're selling. The "just buy something else" argument doesn't work when even the generic versions of meds are spiking their prices.

 

[behOemoth]

Governments should regulate Pharma very heavily. Either it is by education or direct sanctions on companies or persons. The "free" market build high prices for common medicine and scum like homeopathy and other alternatives.

 

[Xx 720]

Something needs to be done. This sounds like a good idea. Hope this gains traction.

 

[samoyed]

Would rather have stronger regulation but this is fine too.

Free market legal drug cartels operating in plain sight. Disgusting.

 

[oofouchugh]

Good, maybe insulin prices and finally be curbed instead of letting people die trying to ration it.