Unlike other countries, the U.S. does not regulate prescription drug prices. Instead, policy makers some 40 years ago came up with another idea to make prices more affordable: harnessing the power of the free market.
They thought if they make it easier for companies to copy brand name drugs and sell them at a much cheaper price, generic drug manufacturers will pour in and drive prices down.
And that鈥檚 worked for a long time. It鈥檚 over the past few decades.
But there are signs that this system may be in serious trouble.
The Checkup鈥檚 question is: Why is that and are policy makers doing anything about it?
Side Effects Public Media鈥檚 Community Engagement Specialist Lizzy McGrevy spoke to Leslie Walker, a senior producer at the health policy news organization Tradeoffs. Tradeoffs released a special series called , which explores the vulnerabilities in America鈥檚 generics supply system.
This transcript has been edited for length, style and clarity.
McGrevy: Hey Leslie, so, how critical are generic drugs for our health care system and why are they in deep trouble now?
Walker: These medicines really are the backbone of American health care.
They now fill 9 out of every 10 prescriptions we take. They lower our cholesterol, manage our diabetes, depression 鈥撯�� you name it.
But this essential industry is now being squeezed on two sides.
On one hand, you鈥檝e got these often very old generic drugs 鈥撯�� critical stuff like antibiotics and cancer treatments that economists told me have almost gotten too cheap.
That鈥檚 forcing some companies to cut corners or exit the market altogether, causing shortages and quality problems.
And then on the other hand, you鈥檝e got some newer, really pricey brand-name drugs that are going 15, even 20 years with no generic competition at all, and that鈥檚 hurting patients too.
McGrevy: And I can鈥檛 help but think, this is 100% bad for consumers but it may not be such bad news for big pharma 鈥撯�� those brand name drug manufacturers. Do they have a hand in any of these problems?
Walker: Definitely, when it comes to those newer, really pricey brand drugs, big pharma has honed some pretty ingenious strategies for stifling competition.
, paying the middlemen who buy drugs on behalf of insurers and employers to favor their products over cheaper generics, just to name a couple.
McGrevy: And Leslie, let鈥檚 talk for a second about the other big issue you highlighted 鈥� shortage and quality problems with these cheaper generics.
We hear about shortages in the U.S. all the time, especially since the pandemic. Are there signs that this is about to get worse?
Walker: You鈥檙e right, Lizzy, that for a while now but there are signs it鈥檚 getting worse.
One recent report found the number of drugs in shortage is at a 10-year high and that shortages are also lasting longer 鈥撯�� three years on average.
Plus, the supply chain for these drugs is also getting more fragile.
Those very low prices are pushing companies to cut more corners and move more manufacturing to countries like India and China.
Economist with the Brookings Institution said that鈥檚 raising a whole new mess of quality and reliability concerns for the U.S.
鈥淎re we prepared for supply chain disruptions from natural disasters? What could happen if there鈥檚 a conflict with China? We have not really truly grappled with these kinds of vulnerabilities,鈥� Wosi艅ska said.
McGrevy: Are policy makers doing anything to try to shore this vital industry up?
Walker: There is a lot of action in Washington. The Federal Trade Commission is on brand companies play to fend off competition.
And in Congress, there鈥檚 a draft bipartisan bill targeting those cheap drugs prone to shortages, basically trying to make those shaky markets more attractive and reliable for manufacturers.
That said, most of the moves we鈥檙e seeing are pretty modest.
And some experts told me they think more sweeping reforms are needed.
That includes , one of the original architects of the 40-year-old law, known as the , that gave birth to the modern generic industry.
鈥淚t was the right thing at that time,鈥� Engelberg said. 鈥淲e derived a lot of public benefit from it, but we put it on this perch and made it some kind of an untouchable law. But times have changed. You have to figure out a new paradigm for new times.鈥�
McGrevy: Thank you so much for this valuable information, Leslie. You can listen to Leslie鈥檚 special series for Tradeoffs. It鈥檚 called and it鈥檚 available wherever you get your podcasts.
The Checkup by Side Effects Public Media is a regular audio segment on WFYI's daily podcast, .
Side Effects Public Media is a health reporting collaboration based at WFYI in Indianapolis. We partner with NPR stations across the Midwest and surrounding areas 鈥� including KBIA and KCUR in Missouri, Iowa Public Radio, Ideastream in Ohio and WFPL in Kentucky.
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