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Elizabeth Warren is trying to break up Big Pharma "cartels" by letting the government make generic drugs

It’s the sort of big idea that someone seeking the White House might take up.
The bill seeks to increase competition and keep drugs at fair prices by creating a new drug-manufacturing unit within the Department of Health and Human Services (HHS).

Democratic Sen. Elizabeth Warren, who’s widely expected to run for president in 2020, introduced a bold piece of legislation Tuesday that seeks to break up generic drug “cartels” by allowing the U.S. government to manufacture its own drugs.

The bill, taken up in the House by senior Democrat Rep. Jan Schakowsky, seeks to increase competition and keep drugs at fair prices by creating a new drug-manufacturing unit within the Department of Health and Human Services (HHS). Right now, pharmaceutical companies operate in the “free market” with little government interference.


Under the bill, the new unit within HHS would manufacture generic version of drugs when only one or two companies produce the drug, the price of the drug has spiked, or the drug is in short supply. The bill would also require the government to begin production of generic insulin within one year of passage.

“In market after market, competition is dying as a handful of giant companies spend millions to rig the rules, insulate themselves from accountability, and line their pockets at the expense of American families,” Warren said in a statement. “The solution here is not to replace markets, but to fix them.”

It’s the sort of big idea that someone seeking the White House might take up and mirrors other progressive legislation gaining steam right now, like Medicare for All and the Green New Deal, an ambitious climate change policy initiative championed by Congresswoman-elect Alexandria Ocasio-Cortez. Warren’s new drug bill, however, might not pass until 2020, when Democrats have a chance to retake the Senate.

Warren and Schakowsky’s legislation is a direct response to an investigation into an alleged price-fixing scheme among pharmaceutical companies. The scheme was meant to eliminate competition so that pharmaceutical companies can profit off of generic drugs, which are meant to be an accessible alternative to brand-name prescription drugs.

One of the most extreme examples is a drug called albuterol, which is used to help alleviate asthma symptoms and sold by generic manufacturers Mylan and Sun. A single tablet of albuterol spiked in cost about 3,400 percent since 2013, from 13 cents to more than $4.70, according to an antitrust lawsuit. The secret deals were struck by 16 companies over more than 300 drugs.


“This is most likely the largest cartel in the history of the United States,” Joseph Nielsen, an assistant attorney general and antitrust investigator in Connecticut, told the Washington Post earlier this month.

Will it pass?

Warren made a name for herself by taking on Wall Street a decade ago, and supporters widely encouraged her to run for president in 2016 as a progressive alternative to Hillary Clinton. Since 2016, her popularity has largely been eclipsed by Sen. Bernie Sanders, who ran an insurgent campaign against Clinton when Warren did not. She’s also faced criticism in recent months over her decision to release a DNA test to prove to President Donald Trump that she had Native American heritage, which angered both progressives and Native American tribes.

Drug pricing, however, is an attractive issue for a potential presidential candidate to take on because it marries a populist policy idea with a near-universally reviled foe: Big Pharma. But Warren had already introduced a bill earlier this year that caps co-pays for prescription drugs, and it has yet to advance out of committee.

Trump has repeatedly singled out the industry as an American evil, and pharmaceutical lobbyists have worried it’s an issue that populist Republicans like Trump could unite with Democrats to tackle. Trump unveiled a limited plan in late October designed to drive down some Medicare drug costs by permitting the government to test-drive price changes.

But Warren and other progressives have said Trump hasn’t lived up to his promises to take on Big Pharma.

“There’s more of a chance on Republicans agreeing [with Democrats] on this than almost any other issue,” Jeff Hauser, director of the Revolving Door Project at the Center for Public Policy and Research, told VICE News. “Republicans know that people are furious with Big Pharma.”

Cover image: Sen. Elizabeth Warren addresses the witnesses during a Senate Special Committee on Aging hearing on the pricing practices of Valeant Pharmaceuticals in Washington, D.C. on April 27, 2016. (Sipa via AP Images)