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Provision to Improve Generic Drug Competition, Ensure Patient Access to Affordable Medication, Clears Key Hurdle

Click HERE for the text of the amendment

Click HERE for a one-pager on the amendment

Washington, D.C. - An amendment offered by U.S. Senator Susan Collins to improve generic drug competition was approved as part of the Food and Drug Reauthorization Act at a Senate Health, Education, Labor and Pensions Committee business meeting today. The amendment is identical to legislation introduced today by Senator Collins, Senator Claire McCaskill (D-MO), and cosponsored by Senator Cotton and Senator Franken, the Making Pharmaceutical Markets More Competitive Act. The amendment, which was adopted unanimously, builds on the work of Senators Collins and McCaskill and the Aging Committee’s bipartisan investigation into sudden, aggressive price hikes in prescription drugs by working to improve generic competition to help lower prices.

“We know that increasing generic drug competition is key to lowering prescription drug prices for individuals and reducing drug spending overall. On average, generic drugs cost 80 to 85 percent less than brand name drugs,” said Senator Collins. “Our amendment would make it easier for generic pharmaceutical manufacturers to enter the market and compete to reduce prices. This is particularly important for our seniors, 90 percent of whom take at least one prescription drug in any given month.”

“The skyrocketing cost of prescription drugs has left far too many Missourians struggling, and our bipartisan, commonsense plan would finally help bring some real relief,” Senator McCaskill said. “By incentivizing competition and speeding up the process for drug approvals, we can bring down costs to make these lifesaving drugs more affordable and accessible for the thousands of Missourians who depend on them.”

In December 2015, Senators Collins and McCaskill, the Chairman and former Ranking Member of the Senate Aging Committee, held the first in a series of hearings on the causes, impacts, and potential solutions to the egregious price spikes for certain drugs. Their investigation strived to understand why companies can make these large price increases and to identify which policies should be considered to counter these disturbing practices. In December 2016, Senators Collins and McCaskill released a report on drug pricing that detailed the Committee’s findings.

The amendment Senator Collins offered today takes a number of steps to foster a competitive marketplace to help keep drug prices down and improve access to affordable prescription drugs for patients:

  • First, the amendment would set a clear timeframe of no more than eight months for the FDA to prioritize the review and act on applications where there is inadequate generic competition. This would capture drug shortages and circumstances where there are not more than three approved drug products being marketed. The Aging Committee’s investigation into sudden price spikes last year found that older drugs with only one manufacturer and no generic competitor are particularly vulnerable to dramatic and sudden price increases.
  • Second, through new reporting requirements, the amendment would improve visibility of the backlog and pending generic applications, priority review applications, average approval times, and facility inspection timeliness, helping to ensure that Congress can perform more oversight of the generics program.
  • Third, to provide additional support and enhance communication with certain applicants to improve the quality of applications from the beginning, the amendment would establish a process for communications in advance of the actual ANDA submission.
  • Fourth, through new reporting requirements, the amendment would improve FDA’s ability to track market exits that can result in drug shortages and price spikes and provide more public information on generic drug markets where there is limited competition.
  • Finally, the amendment would set a clear timeframe for FDA to act on facility inspections after an applicant has notified FDA that they have taken necessary actions to resolve identified issue.

By taking these steps, Congress would enhance regulatory certainty for generic drug companies, help prevent shortages, increase competition to lower prices and avoid monopolies, and deter practices that can lead to unjustifiable exorbitant price hikes.