In an unusual development in the Senate, senators from the Republican side like Sen. Ted Cruz – (R- TX) to Democrat Sen. Diane Feinstein (D – CA) agree that the process of converting brand name drugs to generics needs to be sped up and reduce drug costs. With 23 co- sponsors the CREATES Act would require brand name drug companies to provide large enough quantities of samples of their drugs to generic manufacturers in a timely manner and that are safe. At the present time brand name drug manufacturers often do not supply the quantities necessary or block access due to safety concerns – unnecessarily delaying the conversion of a brand name drug to a generic. The bill provides a remedy for generic manufacturers by allowing them to sue the brand name manufacturers for not providing the necessary samples.
Sen. Patrick Leahy (D-VT) a bill sponsor, says the Congressional Budget Office estimates the bill would save the federal government about $3.8 billion over a decade in drug costs. The Congressional Budget Office and the Generic Pharmaceutical Association estimate a total savings of $250 billion in 2013 by using generic drugs versus brand name drugs.
Source: CBO, GPha – 2014
As we have noted before drug companies are running their companies focused on making unreasonable levels of profit through $50 billion stock buy backs to increase executive and shareholder compensation and paying $1 billion a year in direct advertising to consumers for prescription medications. If the drug companies allocated these wasted funds toward price reduction we would see a dramatic reduction in drug prices. The CREATES Act is a good bi-partisan way to at least begin to tack down agreement on drug price reductions in a fair way.