US Federal law currently requires branded drugmakers, but not generic drugmakers, to pay a rebate when their prices rise above inflation levels. Congress launched an investigation in November 2014 into recent price increases for generic drugs. A separate Department of Justice inquiry is also underway into price increases for generic drugs.

Independent Bernie Sanders in the Senate and Democrat Elijah Cummings in the House said when the investigation was launched that extending the existing law to cover generic drugmakers, through the Medicaid Generic Drug Fairness Act, would save US taxpayers US$500 million over 10 years. Cummings and Sanders wrote to Dr Reddy’s in 2014, requesting pricing information for drugs including the migraine treatment Divalproex Sodium ER, the price of which had increased by 736% between October 2013 and April 2014.

The Generic Pharmaceutical Association (GPhA), which represents generic drugs companies, says the inquiries are focussing too narrowly on just a few price hikes.

‘Generic drugs continue to be a resounding success in lowering healthcare costs and benefiting patients,’ said GPhA president, Mr Ralph Neas, in a statement from the association. ‘Indeed, generics saved US$239 billion in 2013 (a 14% increase in savings from 2012) and more than US$1.46 trillion over the recent decade.’

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