Get the Government into the Manufacture and Distribution of Generic Drugs – Who Thought This One Up?

It looks like Senator Elizabeth Warren thinks it is a good idea! (see here!)  I think it is poppycock!  Just think of the problems we have now with drug shortages and recalls.  The stringent nature of the cGMPs and pharmaceutical manufacturing, in my opinion, do not lend well to government intervention.  What a conflict of interest the FDA Office of Regulatory Affairs would have in inspecting the government manufacturing operations!

The first year after Reagan closed the United States Public Health Service, hospitals and clinics that provided health care services to many different beneficiaries, including the Coast Guard, military, National Ocean Service members, NOAA, as well as indigents, the cost for delivering the same care was two to three times what the government had to pay.  That was the only time I have seen a government agency actually make a difference in cost containment.  But, for the government to get into actual procurement of active pharmaceuticals, inactive ingredients, container closure components, purchasing manufacturing equipment, performing lab analysis, developing analytical methods, performing or contracting for bioequivalence studies, performing the manufacturing, then distributing the product, and inspecting itself, well, that is too much for me to fathom.

Knowing how the government procurement system currently works, it is hard for me to not only believe that the finished product would cost less than what streamlined generic manufacturers could charge but that the government could be timely or efficiently capable to handle dealing with the rapidly changing drug shortage landscape.  And if it loses money to try to get a drug in shortage to the market, who pays?  Well, the obvious answer is the taxpayer, and that does not bode well for saving consumers money.

I have been involved in U.S. healthcare and/or drug regulation in some form or another since 1974 and I can tell you that, with the exception of delivering direct health care, the government is no match for private industry.  The U.S. government is historically slow to react and is constrained by a huge bungling bureaucracy that would cripple any effort to realize the goal.

The AAM reports that about 90% of prescriptions are filled generically and that they only account for a little over 26% of the costs of all drug spend in this country.  I’m sorry, but we have a system that works, let’s not let the government try to make the situation worse by getting the government into the manufacture of generic drugs.  There is already one consortium trying to address the drug shortage problem by gaining approval of a limited number of generic drugs.  Let’s see how that one works before having our government try to dive into this deep-water pool!

I usually don’t place a disclaimer in my posts but, just to be safe, this blog post represents my own personal opinions and not necessarily those of Lachman Consultant Services or its management.