The CREATES Act Is Back

This past Thursday, April 27, a major piece of legislation that deserves far more attention made its debut in the Senate. I refer to the “Creating and Restoring Equal Access to Equivalent Samples Act of 2017,” abbreviated as the CREATES Act of 2017. While this bill originally was scheduled to debut back in February, apparently negotiation in the Senate kept it in reserve.

The time out of the sun has done nothing to weaken the bill. In fact, it has strengthened it, as its supporters now include than ordinarily implausible list of cosponsors that includes everyone from Chuck Grassley (R-IA), Mike Lee (R-UT), and Tom Cotton (R-AR) on the Right, to John McCain (R-AZ), Susan Collins (R-ME), and Claire McCaskill (D-MO) in the center, to even Dick Durbin (D-IL), Richard Blumenthal (D-CT), and Dianne Feinstein (D-CA) on the Left. In other words, this is a bill that lacks support from literally no faction within the U.S. Senate.

This should surprise no one, because once you cut through all the policy jargon surrounding it, the purpose of the bill is about as commonsensical and necessary as you can get. Effectively, the bill is designed to make it easier for generic drug manufacturers to obtain samples of off-patent drugs from brand name companies without resorting to full scale lawsuits. Currently, many brand name companies attempt to deny their generic competitors these samples on dubious or entirely specious grounds, claiming they run afoul of programs known collectively as Risk Evaluation and Mitigation Strategy (REMS) programs. In essence, big pharmaceutical companies abuse safety measures to claim their competitors are offering unsafe products as a means to keep control of the market for drugs that have already lost patent protections. It’s basic anticompetitive behavior, and it’s technically already illegal, but the means to remedy it is often too expensive and time consuming for many companies to engage in. The CREATES Act reforms that.

To no one’s surprise, such a change does not sit well with the Monopoly Men of Big Pharma, who have mounted one of the more distorted public campaigns against the bill. Their concerns often fly completely in the face of the bill’s plain language, and are just as often fact free, but because of the lobby’s large amount of money and influence, it’s possible some lawmakers will be tempted to take their concerns seriously.

It is essential that those concerns be rebuffed, not merely from the standpoint of good policy, but from the standpoint of defending free markets. Let’s be quite clear: the CREATES Act is designed to make what is an already barely free market slightly freer by cracking down on the monopolies that infest the pharmaceutical sector. Any decent libertarian or conservative who’s read their Milton Friedman knows that monopolies are terrible for capitalism. But in the case of pharma, monopolies are what drives their profits, usually in the form of drug patents. And believe me, the means by which pharma tries to keep drug patents going can get truly disgusting on their own, but that’s not the issue here. Here, we are dealing with drugs that have already lost their patent protections and are now open to generic manufacturing. This bill is designed to stop these companies from trying to enforce a de facto monopoly on off-patent drugs long after their legal monopoly has expired, and often in defiance of the law. And if Friedmanite conservatives know monopolies are bad, extralegal ones are really bad.

It is all to the good, then, that even in a case as clear-cut as this, the spirit of bipartisanship can unite such unlikely partners as Lee, McCain, and Durbin. As believers in a free market and in the rule of law, we would be well advised to join them.

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