Aiming to lower prescription drug prices, U.S. Sen. Bill Cassidy (R-LA) proposed a bill that would close a loophole that allows drug companies to limit market competition while continuing to pull in profits at the same time.
“Monopolies within the health care system drive drug prices up, making drugs unaffordable,” Sen. Cassidy said. “Closing the orphan drug loophole will lower drug prices by encouraging market competition.”
The bipartisan legislation, the Fairness in Orphan Drug Exclusivity Act, S. 3271, would amend the Federal Food, Drug, and Cosmetic Act with regard to limitations on exclusive approval or licensure of orphan drugs. Sen. Cassidy sponsored the bill on Feb. 11, with U.S. Sens. Tammy Baldwin (D-WI) and Jeanne Shaheen (D-NH) signing on as original cosponsors.
Sen. Cassidy’s office explained that drug companies have been given financial incentives in the form of seven years of market exclusivity if they can prove to the Food and Drug Administration (FDA) that a new drug would not be economically viable without that incentive. Those exclusive rights remain for seven years even if the drug becomes economically viable on its own and the drug companies earn substantial profits.
The legislation would allow the FDA to remove market exclusivity if the drug company cannot continue to prove that the drug would be economically unviable when facing competition, which the senators said would drive down the cost of drugs.
“Drug companies must have the means to innovate, but they should not be allowed to exploit the market,” Sen. Cassidy said.