To drive meaningful competition in the health care marketplace and bring down drug prices, the Food and Drug Administration (FDA) is trying to approve more generic drugs. Between October 1, 2016 and the end of September, it has approved a record number of generic drugs. The question is whether more generic drugs will mean lower prices?
Over the course of the last twelve months, the FDA approved 763 generic drugs, nearly 18 percent more than in the prior year, Stat News reports. FDA Commissioner Scott Gottlieb is trying to make good on his commitment to speed up the approval process for generic drugs and address the public’s growing concern over high drug prices.
In some instances, the FDA is approving the first generic prescription drug alternative to a brand-name drug. In other instances, the FDA is approving a third, fourth or fifth generic. With each additional generic drug approval, the price of the drug tends to come down, and there is less risk of a drug shortage.
The FDA is seeing many more applications by generic drug companies for approvals of their drugs–1,292 this past year from 852 the prior year. Interestingly, there are 50,000 pharmaceutical companies in India alone, many of which have the ability to file applications with the FDA. And, China also has a robust number of pharmaceutical companies.
A bi-partisan bill in Congress, the CREATES Act, would make it easier for generic drug companies to market generic drugs. Today, Pharma too often has the power to block generics from entering the market. And, it wields that power to block competition and keep their brand-name drug prices high.
The Congressional Budget Office estimates that the CREATES Act would help bring down drug prices, saving the federal government $3.3 billion over ten years. But, generic manufacturers are raising prices on some generics significantly, and Congress is still not prepared to step in to regulate drug prices as virtually every other country has done. Time will tell how much the entrance of new generics on the market will bring down drug costs.
Here’s more from Just Care:
- How Pharma keeps generics off the market
- Four things you may not know about generic drugs
- With drug prices soaring, millions of Americans buy drugs abroad
- One out of three FDA-approved novel therapeutics–drugs and biologics–have safety risks
- No projected increase in standard Medicare premium, but for many premiums may still arise