One thing that can be unanimously agreed upon around the United States is that drugs and medical treatments are outrageously expensive. Americans lead in total amount spent on drugs globally, with costs recently rising to an average of $1,200 per person per year. If slashing the price of drugs in the US is a serious priority, these are three actions congress can take:
Link innovation-friendly policies to price concessions: Developing and researching new drugs is a very expensive and lengthy procedure in which companies often face a high percentage of failure. To offset costs, drug companies are forced to charge exorbitant prices – something that has to change. With innovation-friendly policies like tax credits to offset research costs or Medicare covering greater medical expenses, these prices could be greatly reduced. Most recently, the FDA has sped up its drug approval process, which has reduced some research costs.
Revamp monopoly protection: Once a company discovers a new drug, it is allowed to patent it for five to twelve years. This allows the companies to profit on its new discovery drug without competition. Unfortunately, these patent protections can last longer than expected since companies also patent minor changes to the main molecule and the drug. Reducing the number of types of patents available to drug manufacturers can greatly reduce the monopoly power of drug companies.
Remove obstacles to competition from generics: Policymakers have been slow to remove barriers for generic drugs when they try to enter the market. Some companies even refuse to provide the samples that generic manufacturers need to prove regulators the equivalence of composition. The CREATES act recently signed in December could put a stop to this practice. Other practices that have to be confronted with antitrust policies have to do with is companies pushing minor changes before monopoly protection expires. This effectively removes the original product from production and even delays generic drugs for an extended period.