Big Pharma’s Price-Gouging and Anti-Competitive Tactics Drive Increased Rx Spending

CMS Report Demonstrates Impact of Out-of-Control Launch Prices and Tactics That Prevent Patients From Accessing Affordable Alternatives

In case you missed it, according to the Centers for Medicare and Medicaid Services’ (CMS) annual report on health care spending, the pricing practices and anti-competitive tactics of Big Pharma kept drug costs rising last year — even as prices on generic drugs fell. The report found “growth in retail prescription drug spending increased from 1.4 percent in 2017 to 2.5 percent in 2018.” CMS attributed the increase to wider use of more expensive brand name drugs that continue to increase in price.

CMS noted costly brand name treatments for cancer and auto-immune therapies were a driving factor. Big Pharma has helped dramatically increase the cost of treating rare and serious conditions by bringing drugs to market with out-of-control launch prices.

And Big Pharma deploys a host of anti-competitive tactics – including things like co-pay coupons, ‘charitable’ kickback schemes and keeping more generics and biosimilars out of the market with REMS and patent abuse – to prevent patients from accessing more affordable alternatives.

‘Charitable’ Kickback Schemes:

It’s no secret that Big Pharma employs a number of shady tactics in order to keep prices high. Recent reports show how brand name drug manufacturers game the system by using industry backed ‘charities’ to provide kickbacks in the form of copays to doctors and patients to quell concerns over sky-rocketing prices.

Co-pay Coupons:

Brand name drug manufacturers have long used co-pay coupons to drive patients towards their expensive drugs and away from cheaper alternatives under the guise that they are helping patients afford their prescription medications. This scheme keeps health care costs high for patients and taxpayers.

REMS Abuse:

Risk Evaluation and Mitigation Strategy (REMS) abuse refers to an anti-competitive tactic employed by Big Pharma to keep less expensive generics and biosimilars from coming to market by denying generic manufacturers access to samples of brand name drugs needed to complete U.S. Food and Drug Administration (FDA) testing.

Patent Abuse:

Big Pharma has a long history of price gouging American patient through patent abuse schemes to hinder generic competition and maintain monopolies over their biggest money makers.

A Recent Series Of Studies Conducted By Initiative For Medicines, Access, And Knowledge (I-MAK) Found That Of The Top 12 Grossing Drugs In America, Over 125 Patent Applications Were Filed And 71 Were Granted Per Drug. These patent applications attempted to block generic competition from entering the market by an average of 38 years, nearly double 20-year protection normally intended under U.S. patent laws. (“Overpatented, Overpriced: How Excessive Pharmaceutical Patenting Is Extending Monopolies And Driving Up Drug Price,” I-MAK, 8/18)

I-MAK also found:

Congress must act to hold brand name drug makers accountable for their egregious price-gouging and anti-competitive practices and lower prescription drug prices for Americans.

Fortunately, there are a number of market-based solutions to curb Big Pharma’s anti-competitive tactics and deliver relief for patients being considered in Congress. Lawmakers must continue to work together, across party lines, to ensure these measures are passed into law before year-end.

Learn more about measures with significant bipartisan momentum in Congress HERE.

Read the full CMS report HERE.


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