ICYMI: New Study Highlights Need to Rein In Big Pharma’s Anticompetitive Tactics That Harm Patients & Taxpayers

IN CASE YOU MISSED IT: A new study by Alex Brill of Matrix Global Advisors (MGA) and commissioned by the Coalition for Affordable Prescription Drugs (CAPD) offers the latest evidence that pharma’s delay tactics are costing Americans billions of dollars. These challenges are especially important as the federal government faces unprecedented debt and millions of Americans are experiencing financial hardships due to COVID-19.  Specifically, this new report dives into one of the anticompetitive tactics that drug companies use to limit generic competition in the marketplace – product hopping – and quantifies the tremendous impact this practice has on rising drug costs for patients and the U.S. health care system broadly.

This latest report reinforces what CAPA and many others have been telling lawmakers, that Big Pharma’s rampant abuse is hurting American patients, it is driving up health care costs and our national debt, and it must be addressed,” said Matthew Lane, CAPA Executive Director.  “It’s not too late for Congress to pass legislation to prevent abuses like product hopping and patent thicketing, in order to improve access to effective, high-quality and affordable generic and biosimilar medicines.  But the time to act is now.

This new 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.

Product hopping is a tactic brand name drug companies use to limit generic competition by forcing patients to switch to new formulations of a drug, often with new patents, and usually with little or no therapeutic difference.  Product hopping is just one of the strategies that companies use to protect profits.

For example, as outlined in this new report, 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.

As CAPA has pointed out previously, companies have been allowed to game the patent system or exploit other legal loopholes to extend a drug’s monopoly far beyond what Congress intended.  This allows pharmaceutical companies to prolong extensive monopolies in order to keep drug prices high at the expense of patients. Additional examples:

  • AbbVie filed over 240 patent applications for a single drug, Humira, and received over 110 granted patents.  This patent thicket has allowed AbbVie to keep competition out of the marketplace while other countries have had access to more affordable biosimilars.
  • Herceptin, a cancer drug sold by Roche/Genentech, had patents first filed in 1985 and has current patent applications pending that could extend patent exclusivity until 2033, a 48-year potential monopoly span.