How the USA’s CREATES Act Restores Competition to the Pharmaceutical Market

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Chester “Chip” Davis, Jr, the President and CEO of the Association for Accessible Medicines (AAM) discusses the Creating and Restoring Equal Access to Equivalent Samples Act (CREATES) and how it will improve access to medicines and restore healthy competition to the market. 

 

American taxpayers, along with millions of patients, will benefit from the restoration of healthy competition.

 

Competition is the fuel of the free market. In our industry, generic and biosimilar drugs compete in a market once the original drugs’ patents have run their course. Patients and health care providers benefit from the availability of equally safe and effective but lower-priced versions of brand-name drugs.

 

Anticompetitive games used by some bad actors in the industry are distorting the pharmaceutical market.  These tactics hamper competition and delay patient access to more accessible medicines. One well-documented ploy: refusing to sell product to a generic or biosimilar developer who needs the reference product in order to conduct testing necessary to gain approval by the Food and Drug Administration. Some branded pharmaceutical companies have exploited safety restrictions, known as REMS (Risk Evaluation and Mitigation Strategy), that have been established for medications that have a higher risk of causing serious side effects or that might be used illicitly and used them as an excuse not to sell samples for testing purposes.

 

To cite one example, the patent for Revlimid, a drug manufactured by Celgene that treats myelodysplastic syndrome and other conditions, is scheduled to expire next year, but Celgene’s abuse of the REMS safety program imposed on the product means that cancer patients will continue to pay monopoly prices.  Unfettered by competition, Revlimid now costs more than $20,000 for a 28-count bottle. Harvard Medical School’s Ameet Sarpatwari has called Revlimid “the quintessential example of the way in which a pharmaceutical company can use a variety of tactics to extend their monopoly and then exploit that monopoly to increase revenues.”

 

FDA Commissioner Scott Gottlieb, among others, has harshly criticized these manoeuvres, which lead to $13.4 billion a year in higher drug costs, according to a recent study by Alex Brill of Matrix Global Advisors. In the absence of legislation, the problem is spreading. Brill found that companies’ misuse of REMS and similar programs has grown nearly 250 percent since 2014.

 

We are finally close to a policy solution to correct this flaw in the marketplace. The Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act would stop brand-name companies from withholding the drug samples that generic and biosimilar manufacturers need to comply with the FDA. Close to a third of the U.S. Senate supports this market-based solution, and the Congressional Budget Office estimates that enactment of the law will save taxpayers nearly $4 billion.

 

American taxpayers, along with millions of patients, will benefit from the restoration of healthy competition. Thanks to two landmark pieces of legislation (the 1984 Hatch-Waxman legislation and the BPCIA) and the hard work of the FDA in implementing them, there is now a specific pathway for generic and biosimilar medicines to enter the market. Drugs meet the same rigorous standards as the corresponding brand-name product, working in the body the same way. Simply put, the law works because it not only protects patients—it also protects the integrity of the market.

 

The CREATES Act is a bipartisan solution with broad support from throughout the health care sector. AAM is counting on patients, providers and anyone interested in a healthy pharmaceutical marketplace to urge lawmakers to pass the CREATES Act, thereby improving the health of patients and our competitive markets.

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