Could Supply Issues Price Consumers Out of Generic Drugs?

by Staff Editor


Generic drugs are one of the greatest bargains in the health care system - but recent price hikes have put a dent in consumers' wallets, according to a new study by National Center for Policy Analysis Senior Fellow Devon Herrick.

"Market consolidation, manufacturers dropping aging products, and raw material shortages have jacked up the price of some drugs," says Herrick. "In other cases, the Food and Drug Administration simply cannot process new applications from competitors fast enough."

In the face of rising drug prices, many lawmakers have instituted policies that only worsen the situation, such as banning efficient pharmacy networks, restricting mail-order pharmacies, and restricting maximum allowable costs. The study highlights several ways to lower America's drug bills, including:

  •  Clearing the FDA's backlog of applications to manufacture generic drugs;
  •  Resist passing perverse regulations designed to protect local business;
  •  Promote competition in the production of generic medications.

"The recent rise in the price of generic drugs has a number of distinct causes," says Herrick. "Unfortunately, unwise drug plan regulations have also boosted consumers' cost when filling a prescription for a generic drug."

This study is part one of Herrick's in-depth examination of the rising costs of generic drugs. The second part, which will examine the regulatory and legal reasons for the price hikes, will be released soon.