It’s time to let the government manufacture generic drugs

by Elizabeth Warren,

Forty-seven states and the Justice Department are investigating a price-fixing conspiracy that’s driving up the cost of generic drugs in the United States. One investigator called it “most likely the largest cartel in the history of the United States.” This crisis calls for action. That is why I’m introducing legislation to authorize the public manufacture of generic drugs wherever drug companies have warped markets to drive up prices.

Drug companies use the “free market” as a shield against any effort to reduce prices for families. But they’re not operating in a free market; they’re operating in a market that’s rigged to line their pockets and limit competition.

Promoting competition used to be a central goal of economic policymaking. Today, in market after market, competition is dying as a handful of giant companies gain more and more market share. And as these companies get bigger, they create a vicious cycle,

It doesn’t have to be this way. Aggressive enforcement of laws protecting competition is just the beginning. In the prescription drug market, the next step should be public manufacturing.

The Affordable Drug Manufacturing Act would allow the Department of Health and Human Services to step in where the market has failed. HHS would manufacture or contract for the manufacture of generic drugs in cases in which no company is manufacturing a drug, when only one or two companies manufacture a drug and its price has spiked, when the drug is in shortage, or when a medicine listed as essential by the World Health Organization faces limited competition and high prices.

Public manufacturing will be used to fix markets, not replace them.

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