Letters to the Editor: A California plan to sell generic drugs can drive down costs

To the editor: In your article on California entering the generic drug market, Allen Goldberg, a spokesman for the generic drug manufacturers trade group, said, “If we’re going to craft policy, let’s understand the data.”

The data are very straightforward. When there are three or more manufacturers of a generic drug, the prices are low. When there is one or two, the prices can be much higher than cost.

Generic drug manufacturers can discourage new entrants that would lower the price by threatening to drop prices so low that the costs of entry can’t be recovered, or by colluding to prevent entry. Both have occurred.

California, by entering the generics market for thinly sourced drugs and guaranteeing a minimum volume, can drive the prices of high-cost generics down to more appropriate levels. This is an appropriate response to the near-monopolies we have for some expensive generic drugs.

Jack Needleman, Los Angeles

The writer is a professor of health policy and management at the UCLA School of Public Health.

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To the editor: Newsom’s idea to have California “white label” its own generic drugs is flawed.

It’s not as easy as simply finding a factory. Anyone manufacturing and selling a specific generic drug must first have approval from the U.S. Food and Drug Administration. That’s not an inexpensive, swift or easy proposition.

Also, generic prices in the United States are the lowest in the Western world. Furthermore, prices are based on volume. If the governor of our nation’s most populous state wants to lower prices, he should follow the money.

Prescription benefit managers (PBMs), the middlemen of the pharmaceutical industry, add tremendous costs to the system while providing little actual benefit. If the governor can’t remove the middleman and offer generics at lower costs, he should demand that the PBMs hired by the state cut their fees so the people of California can enjoy lower prices.

Peter J. Pitts, New York

The writer is president of the Center for Medicine in the Public Interest and a former FDA Food and Drug Administration associate commissioner.