The Affordable Prescription Drugs Act: A Solution for Today's High Prescription Drug Prices

By Pinzone, John D. | Journal of Law and Health, Spring 2001 | Go to article overview

The Affordable Prescription Drugs Act: A Solution for Today's High Prescription Drug Prices


Pinzone, John D., Journal of Law and Health


I. INTRODUCTION

As we move forward into a new millennium, a large number of Americans, especially senior citizens or those without insurance, will find it increasingly difficult to obtain prescription drugs because of rising prices. International price increases have had the most severe consequences in third world countries where sixty percent of the population does not have regular access to essential drugs. (1) While this paper focuses on domestic prescription drug prices, many analogies may be drawn between the problems created by high prescription drug prices in the United States and those in third world countries.

Many have attributed rising prescription drug prices to the laissez-faire attitude of the U.S. federal government. As a result, Congress has introduced new proposals to combat both these criticisms and prices. Many of these proposals reduce the amount of protection granted to a patent holder of a newly developed prescription drug. Large pharmaceutical companies are lobbying against these proposals, claiming that implementing such "price controls" will hinder the research and development of new and important drugs. (2) They argue that the patent protection offered to pharmaceutical companies allows them to recoup and profit from their monetary investments on recently introduced drugs, and in turn, allows them to produce new essential drugs. (3) Using this argument as a catalyst, the pharmaceutical industry has pushed for the adoption of a style patent protection regime internationally. (4) Ultimately, the Pharmaceutical Manufacturers Association (PMA) of the U.S. appealed successfully to the government to take retaliatory trade measures against third world countries that did not change existing national legislation, which provided no protection to pharmaceutical products. (5)

High prescription drug prices must be reduced through a proposal that allows new drugs to be more accessible and affordable to those who need them, while maintaining the drug companies' ability to profit and reinvest in new essential drugs.

This article will discuss a recently proposed bill, The Affordable Prescription Drugs Act (APDA), (6) and how it will attempt to strike a balance between reducing prices to make essential drugs more available and affordable, and working with pharmaceutical companies to make sure they profit and reinvest their money into research and development of new essential drugs. It argues that the APDA increases competition in the market place, thus reducing the price of prescription drugs, while still allowing pharmaceutical companies to profit from their inventions. In reaching this conclusion this article examines the bill itself, how to define an essential drug, whether current prices are fair, Congress' attitude towards these prices, the drug industry's justifications for high prices, and presents a rebuttal argument against those justifications.

II. THE AFFORDABLE PRESCRIPTION DRUGS ACT

Representative Sherrod Brown (7) introduced APDA in the House of Representatives on September 23, 1999. (8) The bill favors "good old fashioned American competition" by reducing the amount of patent protection granted to pharmaceutical companies. (9) The APDA would allow the government to force price competition for drugs that provide a substantial health benefit, but carry an excessive price tag. (10) It would accomplish this by issuing a compulsory license to a drug manufacturer to produce a generic version of a brand name drug which is still protected under patent. (11)

Certain steps must be taken and requirements met before a compulsory license is granted. The bill requires three important elements to be satisfied. First, the Secretary of Health must determine "[s]uch compulsory license is necessary to alleviate health or safety needs which are not adequately satisfied by the patent holder, contractor, licensee, or assignee." (12) This fast element determines whether the drug should be considered essential or non-essential. …

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