December 20, 2019

Schakowsky, Warren Reintroduce Affordable Drug Manufacturing Act, Legislation to Radically Reduce Drug Prices through Public Manufacturing of Prescription Drugs

Bicameral Bill Would Address Market Failures and Increase Competition in the Generic Drug Market by Establishing New HHS Office of Drug Manufacturing

Lawmakers Also Release New Report Identifying Hundreds of Drugs Facing Limited Market Competition, Highlighting Need for Affordable Drug Manufacturing Act

Bill Text (PDF) | One-Pager (PDF) | Section-by-Section Summary (PDF) | Report (PDF)

Washington, D.C. - United States Senator Elizabeth Warren (D-Mass.), a member of the Senate Health, Education, Labor, and Pensions Committee, and Congresswoman Jan Schakowsky (D-Ill.), a member of the House Committee on Energy and Commerce, today announced the reintroduction of the Affordable Drug Manufacturing Act, an ambitious proposal to address the skyrocketing price of prescription drugs. The bill would lower prices and increase competition in the generic pharmaceutical market by establishing an Office of Drug Manufacturing within the Department of Health and Human Services (HHS) tasked with manufacturing select generic drugs and offering them to consumers at a fair price that guarantees affordable patient access.

The lawmakers also released a new staff report, Costly Cures: The Broken Generic Drug Market and the Urgent Need for the Affordable Drug Manufacturing Act, which identifies market failures in the generic drug industry and outlines how the Affordable Drug Manufacturing Act would address these failures. It also identifies hundreds of examples of drugs that are potential candidates for public manufacturing under the bill.

"There is not enough competition in the market for generic drugs, and that allows giant pharmaceutical companies to line their pockets while millions of families are crushed by the rising cost of prescription drugs," said Senator Warren. "Our bill would fix the broken generic drug market-making it more competitive and dramatically lowering prices."

"Our prescription drug market is broken. Drug manufacturers are price gouging consumers without enough competition from more affordable, generic drugs" said Congresswoman Jan Schakowsky. "That's why I'm proud to reintroduce the Affordable Drug Manufacturing Act with my friend Senator Elizabeth Warren. It's time for our federal government to step up and ensure Big Pharma to faces real, honest competition that will lower drug prices for people across the United States."

Prescription drug manufacturers have relentlessly raised prices on U.S. consumers. In the first six months of 2019, pharmaceutical corporations increased prices by over 10%, while in the past 10 years, spending on retail prescription drugs in the U.S. increased by nearly $100 billion. 

When patents on brand-name drugs expire, patients and providers have traditionally relied on generic drug companies to enter the market and create competition, driving down costs and ensuring a reliable supply of affordable drugs. But the new report reveals how the generic drug market is plagued by market failures that keep the costs of drugs high.

Senator Warren's and Representative's Schakowsky's report also identifies key drugs that could be publicly-manufactured under the bill, finding that:

  • Generic drug markets often lack competition, resulting in higher prices.
  • Uncompetitive generic drug markets allow for market manipulation, causing rapid increases in generic drug prices.
  • Pharmaceutical companies have been accused of engaging in illegal activity to keep generic drug prices high.
  • Uncompetitive generic drug markets increase the risk of drug shortages, leaving patients without critical treatments in times of need.

The Affordable Drug Manufacturing Act would address these market failures by giving the HHS Secretary the authority to manufacture generic drugs in cases where the market has failed and strengthen the generic market for the long term by jump-starting competition. The Act:

  • Establishes an Office of Drug Manufacturing within HHS charged with lowering prices, increasing competition, and addressing shortages in the market for prescription drugs;
  • Authorizes the Office to manufacture generic drugs under one of the following key conditions:
    • No company is marketing the drug,
    • Only one or two companies are marketing the drug, and the price has spiked;
    • Only one or two companies are marketing the drug, and the drug is in shortage; or
    • Only one or two companies are marketing the drug, the price is a barrier to patient access, and the drug is listed as an "essential medicine" by the World Health Organization.
  • Authorizes the Office to manufacture any drug that the federal government has licensed, including under existing compulsory licensing authorities;
  • Allows the government to sell publicly-manufactured drugs at a fair price that covers manufacturing costs while ensuring patients have access to these drugs;
  • Requires the Office to begin public production of insulin, naloxone, and antibiotics within one year;
  • Improves the ability of new companies to enter the generic drug market by authorizing the public manufacturing of active pharmaceutical ingredients;
  • Requires the Office to offer to sell the rights to publicly-manufactured drugs to manufacturers who commit to keep the drug on the market at a fair price, but authorizes the Office to resume production if a manufacturer violates these commitments.

Under the bill, the federal government-at the discretion of the HHS Secretary-could manufacture hundreds of drugs and would be required to manufacture insulin, naloxone, and antibiotics. The lawmakers' report contains key detailed examples and a list of over 400 drugs that could qualify for public manufacturing under the Affordable Drug Manufacturing Act.

The Affordable Drug Manufacturing Act, which was first introduced by the lawmakers in December 2018, is endorsed by Public Citizen, Social Security Works, Indivisible, CREDO, Center for Medicare Advocacy, American Federation of Teachers, Knowledge Ecology International, Action Center on Race and the Economy, Business for Medicare for All, Physicians for a National Health Program, MomsRising, Families USA, Alliance for Retired Americans, AFSCME, AIDS Healthcare Foundation, and People's Action.

Read Senator Warren's 2018 Washington Post op-ed on the legislation here. 

A member of the Senate HELP Committee, Senator Warren has been a leading voice in Washington calling for lower prescription drug prices since joining the Senate in 2013. Congresswoman Schakowsky, Chair of the Consumer and Protection and Commerce Subcommittee on the House Energy and Commerce Committee, has been a leading voice in Washington calling for lower prescription drug prices since joining the House in 1999.

Senator Warren and Congresswoman Schakowsky are cosponsors of the Medicare for All Act of 2019, a bill that would ensure that no family goes broke paying for health care. Senator Warren and Congresswoman Schakowsky have also co-sponsored the Medicare Drug Price Negotiation Act (S.99/H.R. 448), a bill that would permit the Centers for Medicare & Medicaid Services to negotiate the prices of prescription drugs offered through the Medicare program; the Affordable and Safe Prescription Drug Importation Act (S. 97/H.R. 447), a bill that would allow for the safe importation of drugs from countries like Canada.

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