Drug Companies’ Anti-Competitive Gamesmanship Comes At Tremendous Cost To U.S. Health Care System And Contributes To Out-of-Control Prescription Drug Prices

Following a hearing earlier this month where lawmakers on the U.S. House Committee on Oversight and Reform blasted Big Pharma executives and exposed egregious examples of the industry’s anti-competitive tactics, the industry’s principal lobbying arm launched a messaging campaign claiming the current system for intellectual property protection of pharmaceuticals has “helped drive innovation and enhance patient access to breakthrough therapies.”

IP protections are, of course, critical for true breakthroughs and new inventions, but this campaign ignores Big Pharma’s rampant abuse of the patent system that has everything to do with hiking prices and boosting profits, and little to do with innovation. The effect of drug companies’ egregious behavior is to deny patients access to their medications and breakthroughs they cannot afford, not “enhance” access.

Gaming the system to undermine competition is a time-honored tradition for Big Pharma. Pharmaceutical companies have a long history of engaging in anti-competitive patent abuse schemes, like patent thicketing and product hopping, to hinder generic competition and maintain monopolies over their biggest money makers — without any new invention occurring.

In fact, a recent study from Avik Roy and Gregg Girvan of the Foundation for Research on Equal Opportunity (FREOPP) finds 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. The report finds that despite representing less than one percent of U.S. prescriptions, biologic drugs account for nearly half of all drug spending. That’s because biologics face less competition from their generic equivalents, known as biosimilars, due to differences in how the marketplace is regulated and how Big Pharma games the system to undermine 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.

Meanwhile, a recent report from the House Committee on Oversight and Reform details “the specific tactics drug companies are using to raise prices, maximize profits, and suppress competition among other companies.” Key findings from the report include:

And while Big Pharma routinely tries to justify the IP status quo and out-of-control drug prices by pointing to research and development (R&D). The truth is:

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

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