DOSE OF REALITY: LAWMAKERS TO PROBE BIG PHARMA PATENT ABUSE AS INNOVATION EXCUSES CRUMBLE

U.S. Senate Judiciary Subcommittee Hearing Tuesday Will Build on Momentum for Lawmakers to Hold Big Pharma Accountable, Lower Prescription Drug Prices

On Tuesday, the U.S. Senate Committee on the Judiciary’s Subcommittee on Competition Policy, Antitrust, and Consumer Rights is set to hold a hearing examining Big Pharma’s egregious anti-competitive practices that drive-up prescription drug prices. In particular, the hearing will examine brand name drug makers’ abuse of the patent system to extend product monopolies and hike prices — without any real innovation occurring.

The hearing has bipartisan support, with Senators Amy Klobuchar (D-MN) and Mike Lee (R-UT), Chairwoman and Ranking Member of the Subcommittee, signaling earlier this year their intent to question drug makers on “the extent to which consolidation and anticompetitive practices have contributed to skyrocketing drug prices.” The hearing adds to the growing bipartisan momentum in Washington D.C. to take decisive action to lower prescription drug prices and hold Big Pharma accountable.

The scrutiny of Big Pharma’s anti-competitive tactics comes on the heels of lawmakers exposing the dishonesty of the industry’s rhetoric that solutions to increase competition and lower drug prices threaten innovation.

Last week, the U.S. House Committee on Oversight & Reform released a report examining financial data from 14 of the largest branded drug makers in the world. The report found that between 2016 and 2020 brand name drug companies:

Big Pharma has a history of defending the industry’s anti-competitive and pricing practices with bogus arguments centered on “innovation,” especially when it comes to patent abuse. But when you take a closer look, it’s clear the industry is just using hollow excuses to defend tactics that limit competition at the expense of consumers.

PRICE HIKES UNCONNECTED TO CLINICAL IMPROVEMENTS
Multiple studies have found Big Pharma’s price hikes have little to no connection to the cost of its development or improvements in drugs’ efficacy. In other words, brand name drug companies set launch prices and hike prices to maximize profits — not because there is any connection to innovation.

TAXPAYERS PICK UP BIG PHARMA’S R&D TAB
While Big Pharma tries to obfuscate their out-of-control list prices by invoking “innovation,” the industry has gotten a huge boost in recent years from taxpayer dollars in the form of taxpayer-funded research at the National Institute of Health (NIH).
BIOLOGIC PATENT ABUSE COULD COST AMERICANS $30 BILLION
A September 2020 study from Avik Roy and Gregg Girvan of the Foundation for Research on Equal Opportunity (FREOPP) found that ballooning spending on U.S. prescription drugs is being particularly driven by Big Pharma’s abuse of the patent system to undermine biologic and biosimilar competition.
Without action, the study’s authors estimate the anti-competitive nature of the biologic drug marketplace will cost American patients more than $30 billion from 2015-2029.

PATENT ABUSE: ‘BUSINESS AS USUAL’ FOR BIG PHARMA
Unfortunately, engaging in anti-competitive tactics is a time-honored tradition for Big Pharma. Pharmaceutical companies abuse the patent system by deploying a host of other anti-competitive tactics – including ploys like co-pay coupons, ‘charitable’ kickback schemes and patent abuse – to prevent patients from accessing more affordable alternatives:

Read more about how Big Pharma’s patent abuse blocks competition, harms consumers and contributes to ballooning taxpayer spending HERE.

Read more on why Big Pharma’s tired argument that innovation justifies their out-of-control prices doesn’t hold up to scrutiny HERE.

Read more on market-based solutions to hold Big Pharma accountable and lower prescription drug prices HERE.

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