WASHINGTON, D.C. (KFGO) – Despite some headway being made to reduce prescription drug costs last year when the Inflation Reduction Act was signed into law, allowing Medicare to negotiate lower drug costs for seniors, Minnesota Democratic Senator Tina Smith says most Americans are still paying too much.
“In fact we pay way more than people in other large, similarly-wealthy countries around the world, because these big drug companies have such big market power in the United States,” Smith said. “We’ve been working on fixing this for years.”
One of the reasons drug costs are so high is the delayed entry of generic versions of brand-name drugs into the market, but Smith has introduced legislation she says would end the anti-competitive, big-pharma ploy known as “parking.”
“It goes after this way that the drug companies game the system to keep lower-cost, generic, just-as-effective medications off the market. Its a loophole in the way our laws are written, and my bill would close that loophole,” she said.
“Parking” occurs when a brand name manufacturer agrees not to sue the first company that submits an application to create a generic version of that drug—a so-called “first filer”—as long as the generic company agrees to delay bringing that generic drug to market. No other company can bring a generic version of a brand name drug to market until 180 days after the first filer has done so.
Smith says currently at least 75 percent of generic products have delayed their market entry due to “parking” arrangements with brand-name companies, and sometimes the delays last years. She says the Expanding Access to Low Cost Generics Act she is co-sponsoring with Indiana Republican Senator Mike Braun would end that practice by allowing generic companies that are not first filers the ability to receive 180-day market exclusivity if the first filer does not come to market after a specified time-frame, changing the incentive structure for generic companies so that first filers rush to come to market rather than “park” their products, and stopping the bottleneck of generic products waiting to come to market.
Smith says the bill has bipartisan support in the Senate and is expected to pass, but getting it through the House of Representatives will be a more difficult road.