In late 2018, Senator Elizabeth Warren (D-MA) released a bill that would create a government-run pharmaceutical manufacturing program which would mass produce generic drugs (like insulin) in order to bring down drug prices and save lives in the process. The bill is unlikely to pass in the Republican-led Senate. However, if Warren wins the 2020 presidential election in which she’s running as a Democratic candidate, it would signal where her major priorities lie.
Elizabeth Warren’s bill, The Affordable Drug Manufacturing Act, was borne out of the realization that drug manufacturers are participating in a conspiracy to prevent generic drug costs from dipping too low. In an article Warren wrote for the Washington Post, she says, “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.” This is not a government takeover of the pharmaceutical industry, she says, but a necessary fix to an out-of-control problem.
The bill would establish the Office of Drug Manufacturing, which would produce generic versions of drugs if a “market failure” is found. According to the bill, a market failure occurs if:
- No company is producing a generic version of the drug,
- The drug is only produced by one or two companies, creating medication shortage and inflated prices, and
- The World Health Organization (WHO) considers the drug “essential medicine” with a too-high list price and produced by only one or two companies.
According to Warren, the price of insulin is a perfect example for why the Office of Drug Manufacturing is a necessary thing.
The price of this century-old drug has skyrocketed more than 1,000 percent within the last 20 years without changes to the formula, making it cost prohibitive for diabetes patients across the country. These high price tags directly contribute to the high-profile deaths of several people who could not afford this life-sustaining drug.
Drawbacks of the bill
While the bill is well intentioned, the execution of such a department could be extremely complicated and timely. Different drugs require different manufacturing protocols and different machinery, meaning it could take years to develop the types of facilities necessary for this undertaking. The government would also have to negotiate with drug wholesalers, pharmacy benefit managers (PBM), and health insurance companies. These negotiations and resulting contracts could take time to establish.
Elizabeth Warren isn’t the only senator attempting to make prescription drugs more affordable for Americans. Last December, Sens. Jeff Merkley (D-OR), Kamala Harris (D-CA), and Amy Klobuchar (D-MN) introduced the CURE High Drug Prices Act, which would allow the government to step in and prevent drug manufacturers from raising drug prices to exorbitant rates.
Merkley also released a separate bill called the Low Drug Prices Act with the intent to make sure the United States doesn’t pay more than other developed countries for the same drugs.
Senator Bernie Sanders (I-VT) also released a bill last November called the Prescription Drug Price Relief Act with the intent to stop drug companies from making billions of dollars in profit each year at the cost of American lives.
The influx of bills aimed at targeting run-away drug prices points to drug pricing and healthcare in general being major platforms for many of the Democratic candidates running for president in the 2020 election.