Editorial: Tackle drug prices and shortages

Why is it that the more common sense a piece of legislation has in it, the more likely it is to languish in Congress?

On Thursday, a well-attended Twin Cities forum led by Democratic Sen. Amy Klobuchar and Federal Trade Commission (FTC) Chairman Jon Leibowitz put a welcome spotlight on the perennial problem of prescription-drug prices and on another emerging concern -- the growing shortage of drugs used to treat cancer and other serious conditions.

While the causes of both problems are complex -- involving manufacturing processes, some questionable industry practices and a regulatory framework that needs updating, among others -- it's clear that action is needed.

The two bipartisan bills highlighted at the forum certainly aren't a cure-all, but they both would be solid steps toward improving drug affordability and managing shortages. That's why it's alarming that both are making slow progress, with headwinds no doubt courtesy of pharmaceutical lobbyists.

The first bill's chief author is Democratic Sen. Herb Kohl of Wisconsin; Klobuchar and Sen. Al Franken are cosponsors. If passed, this legislation would help bring down drug prices and tackle availability by restricting so-called "pay to delay" deals between brand-name pharmaceutical manufacturers and generic drugmakers.

These deals keep generic versions of a brand drug off the market for a length of time as the drug's patent protection expires. Generic drugs can cost up to 90 percent less than brand-name drugs, according to a recent FTC report.

The money shelled out for the continued use of brand-named drugs comes out of the pockets of consumers and health insurers and out of the federal budget (the federal government pays for about a third of prescription drugs used in the United States). These troubling deals are legal and proliferating.

The FTC reports that there were 28 potential pay-for-delay arrangements in 2011; the deals involved 25 brand-name drugs having total American sales of more than $9 billion a year. The FTC reported just three such arrangements in 2004.

The pharmaceutical industry says that negotiated deals between generic drugmakers and brand-name drugmakers, which avoid court challenges, actually bring generic versions to market sooner.

Still, a 2011 analysis by the nonpartisan Congressional Budget Office concluded that the Kohl legislation, if enacted, would reduce total U.S. prescription-drug expenditures by $11 billion over the next decade. About $4.8 billion would be savings for the federal government.

The second bill, whose lead author is Klobuchar, directly addresses drug shortages. With the number of essential medications in short supply having nearly tripled since 2005, this is a crisis that potentially puts lives at risk.

The Klobuchar bill would build on previous moves to require earlier warnings if there are product discontinuations, supply interruptions or other problems that could lead to shortages.

The FDA would also have the ability to fine manufacturers that don't report problems. In addition, the bill would require the agency to maintain a database on shortages.

Lawmakers should also explore the regulatory environment and consider updates that would speed drug production without compromising safety. In the meantime, the Kohl and Klobuchar bills are a solid start in addressing drug affordability and availability.

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