The Short on Competition Act
January 27, 2017
“Our drug industry has been disastrous,” then-President-elect Trump said in his first post-election news conference earlier this month. “They’re getting away with murder.”
Okay, murder may be an exaggeration, but pharmaceutical companies are getting away with charging far more for their products in this country than they do in others. But as is often the case, the real problem here is not too little government intervention in the marketplace, but too much.
First, some background. One of the primary causes of rising health-care costs in the United States, both before and after Obamacare, is the skyrocketing prices of prescription drugs. And while pharmaceutical companies do need strong patent protections of the medications they discover, so they can recoup their research and development costs, far too often excessive red tape at the Food and Drug Administration extends the monopoly pricing that results from intellectual property protection for years after a drug’s patent has expired.
Generic versions of name brand drugs are what eventually drive down brand-name drug prices, but those generics still must get approval for sale from the FDA, and the FDA has admitted that they currently have a four-year backlog for approving generic drug applications.
Without generic drug competition, drug prices in the United States are far higher than they should be. Mylan’s EpiPen, for example, can sell for up to $600 a dose in the United States, while an equivalent Jext pen sells for between $34 and $67 throughout Europe.
We can begin to bring these high drug prices down for American consumers and patients by lifting some of the bureaucratic red tape that strangles competition. That is why I helped introduce the Short on Competition Act with Sen. Amy Klobuchar (D-MN) this week.
The Short on Competition Act would empower the Secretary of Health and Human Services (HHS) to temporally allow importation of drugs in markets where there are fewer than five competitors and the FDA has approved a drug’s sale for more than ten years. Eligible countries from which the United States could start importing affordable prescription medications under this bill include Canada, Australia, Japan and members of the European Union.
On its own, this bill is not a comprehensive solution for rising health-care costs, but it is a good first step that will demonstrate how lower government regulation and increased competition can help American patients.