Sen. Elizabeth Warren released a bill Tuesday that would turn the U.S. government into a generic-drug manufacturer, saying it’s a surefire way to bring down prescription prices.
The bill from Mrs. Warren, a Massachusetts Democrat and potential White House contender, would set up a manufacturing office within the Health and Human Services Department to make select drugs and offer them at an affordable price.
She says the generic market is supposed to inject competition into the markets, yet too few companies vie for consumer dollars, leaving prices high.
The industry cannot be trusted to correct itself, she added, as the Department of Justice reportedly investigates “a massive price-fixing conspiracy” among generic manufacturers.
“In market after market, competition is dying as a handful of giant companies spend millions to rig the rules, insulate themselves from accountability, and line their pockets at the expense of American families,” Mrs. Warren said. “The solution here is not to replace markets but to fix them.
Rep. Jan Schakowsky, Illinois Democrat, introduced a House companion to Mrs. Warren’s bill, dubbed the Affordable Drug Manufacturing Act.
Mrs. Warren said the legislation would require the newly created Office of Drug Manufacturing to make generic insulin within one year. The rising price of insulin has sparked a nationwide outcry amid diabetes patients.
Otherwise, the bill says the government should step in if: no company is making a generic version of a drug when the brand-name patent expires; only one or two companies make the drug and there’s been a price hike or drug shortage; or if only one or two companies make it, the price is a barrier to access and the World Health Organization designates it as an “essential medicine.”
The bill is an ambitious entrant into the collection of ideas that members of Congress and the Trump administration are pitching to bring drug costs down. Voters frequently cite rising drug costs are one of their key concerns.
“Elizabeth Warren is putting oxygen in the room for a bolder progressive Democratic congressional agenda in 2019 — and her big ideas will dominate the 2020 conversation,” said Stephanie Taylor co-founder of the Progressive Change Campaign Committee
Besides Mrs. Warren, a set of Democratic 2020 contenders — Sens. Kamala Harris, Jeff Merkley and Amy Klobuchar — introduced a bill last week that would require drug companies to justify any price increases of 10 percent over the past year, 20 percent over the preceding three years or 30 percent over the last five years.
If HHS found the hikes unreasonable, it could order the company to reimburse consumers, insurers and public programs like Medicare and Medicaid and restore the price to its original level, before the alleged gouging.
Companies would also face civil penalties.
Sen. Bernard Sanders, Vermont independent and hero to the progressive left, introduced a bill that would punish companies that refuse to charge Americans no more than the median price for the same drugs in countries like Canada or Germany.
It would allow the federal government to authorize a generic version of the drug, regardless of patents or exclusivity rights.
President Trump, meanwhile, is rolling out a pricing blueprint that tends to rely on market-oriented reforms — instead of letting the government step in, as prominent liberals are proposing.
For instance, Mr. Trump wants drug companies to disclose their list prices on television ads.
Some Republicans are wary of a separate idea that would align doctor-administered drugs under Medicare Part B to what other developed nations pay under an International Pricing Index.
They say it smacks of pricing controls that are anathema to free-market conservatives, though the administration has defended the idea.
“We take the list price the pharma gives us and we pay 6 percent on top of that,” Health Secretary Alex Azar told Axios at a recent health care event. “We’re a price fixer, we’re just a bad one.”
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