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S. 3775 (115th): Affordable Drug Manufacturing Act of 2018


Should the government get into the business of manufacturing medicines?

Context

About 40% of generic prescription drugs are only made by one single company. With a lack of sufficient competition to keep prices down, many prescription drug prices are soaring in America.

The Justice Department — usually friendly to business interests under the current administration — even opened up an investigation into a possible price-fixing conspiracy among 16 big pharmaceutical giants.

What the bill does

The Affordable Drug Manufacturing Act would create a new federal office to combat the current private sector-only production of prescription drugs.

The new Office of Drug Manufacturing would be a subset of the Department of Health and Human Services. It could only produce drugs under the following conditions: there is already a patent for the medicine, no company is currently producing the drug; or only one or two companies produce the drug but the price is deemed “a barrier to patient access.”

Also, the office’s director position could not be occupied by a former drug company lobbyist nor a former executive at any drug company found guilty of wrongdoing.

The legislation was introduced in December 2018, in the House as H.R. 7348by Rep. Jan Schakowsky (D-IL9), and in the Senate as S. 3775 by Sen. Elizabeth Warren (D-MA).

What supporters say

Supporters argue the legislation offers a publicly-funded alternative while the private sector giants raise prices with little real competition.

“In market after market, competition is dying as a handful of giant companies spend millions to rig the rules, insulate themselves from accountability, and line their pockets at the expense of American families,” Sen. Warren said in a press release. “The solution here is not to replace markets, but to fix them. The Affordable Drug Manufacturing Act will introduce more competition into the prescription drug market, and bring down prices for consumers.”

“Pharmaceutical corporations have spiked prices, stifled competition, and thickened their own wallets,” Rep. Schakowsky said in a press release. “It’s time for pharmaceutical companies to face real, honest competition in the marketplace and it’s well past time for prescription drug prices to come down.”

What opponents say

Opponents counter that the bill targets an industry which helps the vast majority of Americans at what are actually low prices, and doesn’t target the real causes of escalating medicinal prices.

“When generics provide Americans with nine out of 10 of their prescriptions at only 23 percent of total spending on drugs, it is hard to fathom why anyone would call this system broken or insist that the government commandeer the business of developing, manufacturing and distributing these medicines,” the Association for Accessible Medicines told Politico in a statement.

“This legislation is an unrealistic distraction from policies that would meaningfully reduce drug prices, such as combating patent abuse and cultivating a robust biosimilars market.”

Odds of passage

Being introduced in mid-December two weeks before Congress ends, the bill is obviously not intended to pass in the current Congress. It could serve as a template for Democrats in 2019, especially in the House where they will hold the majority.

It also may serve to boost Sen. Warren’s profile in the run-up to an anticipated presidential run.

Last updated Dec 26, 2018. View all GovTrack summaries.

The summary below was written by the Congressional Research Service, which is a nonpartisan division of the Library of Congress, and was published on Dec 18, 2018.


Affordable Drug Manufacturing Act of 2018

This bill establishes an Office of Drug Manufacturing within the Department of Health and Human Services for the purposes of lowering prices, increasing access, and addressing shortages of prescription drugs, including insulin.