CEI Joins TPA Coalition Letter on Reducing Barriers to Affordable Medications

Chair Scott, Ranking Member Gillibrand, and Members of the Committee:

We, the undersigned organizations, representing millions of taxpayers and consumers across the country, urge you to safeguard the vital role medications play in the American healthcare ecosystem. Recent hearings and statements from the committee have expressed deep concern over internationally sourced active pharmaceutical ingredients (APIs). However, there are ways this committee can support domestic production of APIs without sweeping mandates or burdensome regulations on the drugs—which result in fewer cures coming to market and high costs for taxpayers and consumers.

According to a 2022 report sponsored by the Department of Health and Human Services (HHS), there are significant regulatory barriers preventing the efficient production of APIs domestically. That report showed—with permitting issues and inspections by the Food and Drug Administration (FDA)—setting up a new plant in the U.S. takes 5-7 years, while adding another line to that plant would take an additional 3-5 years. Congress in tandem with the agency can take steps to foster expedited permitting to incentivize domestic production.

Further, FDA approval of medications takes entirely too long, leaving needed savings on the table. An in-depth analysis by the oncology news and information platform OncoDaily concludes, “Developing a new drug typically takes an average of 10 to 15 years, depending on various factors such as the type of drug and regulatory processes.” These unnecessarily-long wait times and high development and regulatory costs result in patients not getting the care they need and taxpayers footing the bill for sprawling bureaucracy.

Manufacturers have tried to keep these costs under control by looking for more efficient, affordable alternatives overseas. However, mandatory discounts for the 340B Drug Pricing program exacerbate existing problems with drug affordability and availability. Many of the groups on this letter have also raised alarms about broader waste, fraud, and abuse within the 340B program.

Drug manufacturers should be able to source their APIs from abroad while being able to pass those savings along to consumers without poorly targeted government policies getting in the way. Other countries are able to produce high-quality APIs at scale in a way that would simply not make economic sense in the U.S. Rather than shrink from global markets, lawmakers should reduce regulatory barriers here at home and support efforts by manufacturers to strengthen the nation’s drug supply. Restrictions, at this stage, would mean fewer therapies available to patients at a higher price.

With many Americans rightfully frustrated about the high cost of medications, this committee has an opportunity to promote commonsense reforms that increase the supply of critical medications. Reducing red tape would be a significant win for taxpayers and patients.

Sincerely,

David Williams
President
Taxpayers Protection Alliance

Justin Leventhal
Senior Policy Analyst
American Consumer Institute

Ryan Ellis
President
Center for a Free Economy

Jeremy Nighohossian
Senior Fellow/Economist
Competitive Enterprise Institute

Pete Sepp
President
National Taxpayers Union