New Study Determines Lack of Biosimilar Competition And Big Pharma Monopolies Are Threatening The U.S. Healthcare System, Costing Taxpayers Billions

WASHINGTON, D.C. – The Coalition Against Patent Abuse (CAPA), a diverse coalition of healthcare providers, consumer groups, patient advocacy organizations, free-market advocates and others, issued a statement today supporting a new study entitled, “The Growing Power of Biotech Monopolies Threatens Affordable Care” by Avik Roy and Gregg Girvan of the Foundation for Research on Equal Opportunity (FREOPP) which reaffirms that American patients pay more for prescription drugs in the United States compared to any other country and a main factor driving these high drug prices is the lack of biosimilar competition for larger biologic drugs.  Abusive patent practices are also costing U.S. patients and taxpayers tens of billions of dollars at a time when the federal debt is at an all-time high and countless families are struggling to make ends meet. 

“This report underlines one of the largest problems facing the U.S. healthcare system today, especially as the federal government works to balance out the insurmountable debt brought on by the coronavirus pandemic,” stated Matthew Lane, executive director of the Coalition Against Patent Abuse.  “U.S. patients have long carried the financial burden of overpriced prescription drugs due to anti-competitive tactics by big pharmaceutical companies to prevent a functioning free market.  It’s not too late for Congress to move legislation in the right direction to prevent further abuses to improve access to effective, high-quality and affordable generic and biosimilar medicines.”

The report finds that for larger biologic drugs – the most expensive class of pharmaceuticals – biosimilar drug competition is often avoided by drawn out, overextended monopolies on biologic patents, highlighting the need for congressional and federal regulation reforms that have allowed biologic pharmaceutical companies to game the patent system to keep prices high.  With an improved competitive landscape, the report determined that, “A responsible agenda to rein in excessively lengthy biotechnology monopolies would increase innovation, because it would motivate companies to develop new medicines, instead of relying on price increases on older medicines to generate returns for shareholders.”

Key Excerpts:

  • The emerging crisis of unaffordable biologic medicines can be illustrated by the two figures below. The first chart illustrates a stark fact: that, in 2018, biologic drugs represented 0.4% of U.S. prescriptions, but 46% of U.S. drug spending, net of rebates. The second chart illustrates that biologics’ share of drug spending is rising. Indeed, over the last four years, the entirety of U.S. prescription drug spending growth comes from the 0.4% of prescriptions for biologic drugs.
  • Indeed, we find that the difference between the U.S. and E.U. policy landscapes for biologic drug price competition has cost U.S. patients $5 billion from 2015 to 2020, and will cost U.S. patients an additional $25 billion over the next decade in the absence of reform.

Read the full FREOPP report here.

Learn more about CAPA’s mission to fight abuses of the patent system here.

Executive Director Matthew Lane authored an op-ed recently in Morning Consult around the need to tackle high drug costs as major pharmaceutical companies moved forward this year with their Summer price hikes as millions of patients suffered financial due to COVID-19.