Warren Seeks to Create Government-Run Generic Drug Manufacturer
Sen. Elizabeth Warren (D-MA) and Rep. Jan Schakowsky (D-IL) introduced identical bills in the Senate and House on Tuesday that would create an Office of Drug Manufacturing within the Department of Health and Human Services (HHS).The office would be tasked with manufacturing generic drugs that are in shortage or where there is limited competition. Specifically, the bill would authorize the office to manufacture drugs when no company is manufacturing them, when only one or two companies are manufacturing them but the price has spiked or they are in shortage, and when there are drugs on the WHO’s essential medicine list and the price is a barrier to access.
According to a GAO report from 2016, the price for generic drugs under Medicare Part D actually decreased significantly since 2010, though for about 300 generic drugs there have been "extraordinary" increases in prices.
The price of insulin also has been in the spotlight as it has skyrocketed in recent years, and the bill would require the office to begin producing insulin within one year of the bill’s enactment.
The bill also requires the office to offer to sell the rights to publicly manufactured drugs to manufacturers that commit to keep a drug on the market “at a fair price.” But the government office could also return to producing that drug if a manufacturer does not abide by its commitments.
Not later than one year after the bill’s enactment, according to the bill’s text, the office is tasked with manufacturing at least 15 applicable drugs. And not later than three years after the bill is enacted, the office is tasked with manufacturing or entering into contracts with entities for the manufacture of not less than 25 applicable drugs.
The bill, which is unlikely to win Republican support, comes as Warren also sent a letter to Republican colleagues on Tuesday calling for hearings on recent reports of price-fixing activities by generic drug manufacturers.
Other Democratic senators also introduced legislation in the past week, with a bill that gives HHS the power to block steep price increases. Pharmaceutical companies would also have to justify certain price increases, and if HHS found the increases to be unreasonable, it could require a company to reimburse consumers, lower the price or pay a civil penalty.