Report Finds Just Five Instances Of Product Hopping Sticks Americans With $4.7 Billion Price Tag

In case you missed it, a new study by Alex Brill of Matrix Global Advisors (MGA), commissioned by the Coalition for Affordable Prescription Drugs (CAPD), demonstrates the tremendous cost to the U.S. healthcare system from just one of the many anti-competitive tactics utilized by Big Pharma to game the system and keep drug prices high.

The tactic, known as “product hopping,” involves a brand name drug company moving patients to a new, reformulated version of a drug when an existing drug’s exclusivity is close to expiring. The tactic effectively allows Big Pharma companies to turn back the clock on exclusivity periods — undermining generic competition and allowing Big Pharma to charge higher prices for longer periods of time.

The report, “The Cost of Brand Drug Product Hopping,” finds that just five examples of product hopping – for the brand drugs Prilosec, TriCor, Suboxone, Doryx, and Namenda – cost the U.S. healthcare system $4.7 billion annually.

For example, in anticipation of generic competition for its blockbuster anti-ulcer drug Prilosec, AstraZeneca, the manufacturer of Prilosec, “introduced and pushed doctors to prescribe” a new drug “which was only slightly chemically different from Prilosec but had 13 years of patent protection left.” The report estimates the one-year cost of this product hop to be almost $2.4 billion.

Another example cited is the cholesterol medication, TriCor, manufactured by Abbott Laboratories. Throughout the 2000s, Abbott engaged in several different product hops for TriCor. Each time generic competition seemed likely to enter the market; Abbott would create a slightly different formulation in order to extend their monopoly over the drug. As the report cites, “By TriCor’s third reformulation — to a version called Trilipix, which was approved in late 2008 — Abbott’s annual US sales for the product had reached nearly $1.4 billion.”

The report builds on a previous report by Matrix Global Advisors, which examines a broader array of anti-competitive tactics used by Big Pharma to game the system and undermine competition to keep prices high.

Policymakers in Washington must act to crack down on Big Pharma’s anti-competitive tactics and price-gouging to lower prescription drug prices.

Read Matrix Global Advisors’ report HERE.

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

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