Will Congress Create Lower Drug Prices?

President Trump has spoken of the need to lower prescription drug prices. One way to do that is to make it easier for manufacturers to bring generic drugs to market. Right now, the process to obtain government approval to bring a generic drug to market is long and complex and provides opportunities for big pharmaceutical companies to delay the process.

The Creating and Restoring Equal Access to Equivalent Samples (“CREATES”) Act (S 974) has been introduced to assess some of these tactics. First it allows generic drug companies to sue big pharmaceuticals to get the necessary samples to begin the process of obtaining Food and Drug Administration (FDA) approval. Encouraging lawsuits to force companies to hand over their property to their competitors is not normally something libertarians should support.

However, thanks to the federal regulations, generic companies need to obtain these samples otherwise they cannot compete and the big pharmaceutical companies will enjoy a de facto monopoly. Therefore the lawsuit or some other means of ensuring generic companies get what they need to obtain FDA approval is needed— assuming Congress does not abolish the FDA and restore a true free-market in pharmaceuticals.

Anyone who thinks this is a deal-breaker should work with the bill’s supporters to come up with another solution to this problem.

CREATES also stops big pharmaceutical companies from stopping generic manufacturers from participating in clinical trials by allowing the FDA to approve safety protocols developed by the generic drug companies, instead of requiring the big companies and their generic competitors to jointly develop the same protocols.

CREATES takes a good first step toward eliminating the pro-big PHARMA bias and reducing drug prices by giving Americans more choices. Campaign for Liberty members should call their Senators and urge them to support the CREATES Act.