Senators Back Bill to Stop Big Pharma from Using Exclusivity Periods to Stave Off Lower-Cost Generics Coming to Market
WASHINGTON, D.C. [02/07/2019]—U.S. Senators Amy Klobuchar (D-Minn.) and Tina Smith (D-Minn.) recently helped introduce legislation to help prevent price hikes for prescription drugs. Sens. Klobuchar and Smith have both traveled across the state and know just how much Minnesotans—and Americans across the country—struggle when it comes to affording the high cost of prescription medications.
The Forcing Limits on Abusive and Tumultuous (FLAT) Prices Act of 2019—led by U.S. Senator Dick Durbin (D-IL) and also supported by Sens. Kamala Harris (D-CA) and Richard Blumenthal (D-CT)—would reduce the time a drug is allowed to exist on the market without a generic competitor (known as an exclusivity period) if the price is increased beyond a certain threshold. This would help lower-cost generic drugs come to market earlier, and help save money for families.
“No family should ever be forced to decide between filling a prescription or putting food on the table,” Sen. Klobuchar said. “This legislation will prevent big pharmaceutical companies from taking advantage of ‘monopoly periods’ to drive up prescription drug costs and put lifesaving medications out of reach for the patients who need them.”
“Too often, I hear from families who are stuck between being able to afford their medications and other things like rent or groceries,” said Sen. Smith.“Patients are going without essential medicines at a time when pharmaceutical companies are hauling in huge profits, and drug company executives are paid millions of dollars. I don’t work for those big executives—I work for the people of Minnesota and across the country. So this bill just makes sense because it allows us to hold them accountable for unfair price hikes and focus on keeping more dollars in Americans’ pockets.”
Currently, pharmaceutical companies are granted “monopoly periods” ranging from five to 12 years by the U.S. Food and Drug Administration (FDA) for new drug approvals. During this time, the FDA agrees to not review lower-cost generic alternatives. Too often, pharmaceutical companies use this period to hit taxpayers and patients with unfair price increases.
The FLAT Prices Act would reduce the FDA-granted exclusivity period for a drug with price increases of more than 10 percent in a year, or similar amounts over a multi-year period. The bill would require drug manufacturers to self-report their price spikes to the Department of Health and Human Services (HHS), and they would have the opportunity to provide an appeal to justify the price increase. Drug manufacturers that fail to report these price hikes would face added reductions in market exclusivity.
The FLAT Prices Act is supported by Consumer Reports, Patients for Affordable Drugs Now, Families USA, National Multiple Sclerosis Society, the American Academy of Neurology, and Knowledge Ecology International
Klobuchar has long championed efforts to bring down the skyrocketing cost of prescription drugs. Klobuchar and Senator Chuck Grassley (R-IA) are the lead sponsors of the Preserve Access to Affordable Generics Act and Biosimilars Act, which would limit “pay for delay” deals in which drug manufacturers use anti-competitive pay-off agreements to prevent or delay the introduction of affordable follow-on versions of branded pharmaceuticals, and the Safe and Affordable Drugs from Canada Act, which allow individuals to safely import prescription drugs from Canada. Klobuchar also introduced legislation—that has Senate 33 cosponsors—to lift the ban on Medicare negotiating for the best possible price of prescription drugs for nearly 43 million seniors enrolled in Medicare Part D. Last Congress, Klobuchar also introduced the Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act with Senator Patrick Leahy (D-VT) and Grassley, which would address abuses and delay tactics that prevent generic companies from performing the necessary testing and distribution necessary for U.S. Food and Drug Administration (FDA) approval. Klobuchar and Senator Mike Lee (R-UT) previously introduced the Short on Competition Act to allow the temporary importation of drugs that have been approved in another country with similar safety requirements and face little or no competition in the U.S.
The very first bill Sen. Smith introduced works to address a loophole that big pharma companies use to keep affordable generic drugs out of the hands of Minnesotans. Sen. Smith also introduced a bill requiring pharma companies to reveal how they’re using the billions of dollars in tax breaks they received as a result of the Republican tax bill. In August of last year, Sen. Smith introduced a comprehensive set of reforms—her Affordable Medications Act—that will help lower prices by increasing transparency, increasing affordability by allowing Medicare to negotiate prices, spur innovation, and protect competition by unblocking unfair and anticompetitive drug monopolies. And just this week, Sen. Smith supported an additional bill to stop brand-name pharmaceutical companies from blocking cheaper generic alternatives from entering the marketplace, the bipartisan Creating and Restoring Equal Access To Equivalent Samples (CREATES) Act.