Authors
Highlight Concern That Pharmaceutical Companies Use Strategies to Delay Patient
Access to Affordable Generic Drugs
Newswise,
January 29, 2016 – An article published online today in Blood, the Journal of the American Society of
Hematology (ASH), suggests that pharmaceutical companies use several strategies
to keep affordable generic drugs from the market, illustrating an emerging
trend that authors say is becoming as harmful to consumers as high-cost
brand-name drugs.
The
market price of pharmaceuticals, some costing patients more than $100,000 per
year, increases public health spending and sometimes forces patients to make
life-or-death decisions when they cannot afford their medications. The authors
write that approximately one in five Americans admit they do not fill their
prescriptions because of cost.
From an economic standpoint, in 2013 the United
States spent nearly 40 percent more per capita on pharmaceuticals than the
second highest spender, Canada.
Generic
drugs, which by law may enter the market once the patent on a brand-name drug
expires, are intended to offer an affordable option for patients without
sacrificing the efficacy and safety of the original formula.
From 2004-2013,
generic drugs saved the U.S. health system nearly $1.5 trillion, according to
the authors. However, for many patients generic drugs are inaccessible.
“The
timely availability of affordable generic drugs is the difference between life
or death for patients with cancer and other diseases who cannot afford
brand-name pharmaceuticals, the majority of which are priced at monopoly levels
and protected by 20-year patents,” said lead author Hagop Kantarjian, MD, of
The University of Texas MD Anderson Cancer Center.
“Unfortunately, these sorely
needed generics are increasingly out of reach. As we sought to understand what
keeps these affordable drugs from the market, we identified several specific
strategies that pharmaceutical companies use to extend their patents and
eliminate competition.”
In
this Blood Forum article, a feature of the journal designed to present
well-documented opinions on issues important to the science and practice of
hematology, Dr. Kantarjian and colleagues assert that pharmaceutical companies
use a variety of strategies to delay, prevent, and suppress the timely
availability of affordable generic drugs.
Among them, the authors detail
"pay-for-delay," in which the company that owns the patent pays a
generic company to delay entry into the market. The Federal Trade Commission
estimates that the pay-for-delay settlements cost taxpayers, insurance
companies, and consumers approximately $3.5 billion per year. In other cases
detailed in the article, the patent-holder deters competition by creating its
own version of drugs at generic prices.
While this practice may reduce costs
for consumers by 4-8 percent in the short-term, the authors suggest that
companies often use the authorized generics as a bargaining chip in
pay-for-delay deals, pledging not to release their own drugs in return for the
true generic company promising to delay market entry.
Other
strategies the authors discuss include investing heavily in advertising the
brand-name drug (often spending more on marketing than on research and
development) and lobbying for laws that prevent patients from importing cheaper
generics from other countries, which the authors write can cost as little as
20-50 percent of U.S. prices.
The authors also highlight some drug companies
that they allege buy out competitors and then increase the price of a newly
acquired generic drug by several fold overnight.
In
addition, the authors also describe a strategy they call “product hopping,”
which involves switching the market for a drug to a reformulated “new and
improved” version with a slightly different tablet or capsule dose that offers
no therapeutic advantage over the original but has a later-expiring patent.
The
company then heavily advertises the new brand-name drug in an effort to
convince patients and physicians to switch. As a result, when the generic
version of the original becomes available, pharmacists cannot substitute it for
the new branded version because state laws allow substitution only if certain
characteristics, such as dosing, remain the same.
In
recognition of the harm and expense that the authors suggest these strategies
impart on both patients and the economy, they propose several solutions that
would support timely access to affordable generic drugs, including allowing
Medicare to negotiate drug prices, monitoring and penalizing pay-for-delay
deals, allowing transportation of pharmaceuticals across borders for individual
use, and challenging weak patents.
“Each
day in my clinic I see leukemia patients who are harmed because they cannot
afford their treatment, some risking death because they cannot pay for the
medicine keeping them alive,” said Dr. Kantarjian. “Overall, these strategies
demonstrate that the trend of high brand-name drug prices has recently infected
generic drugs, as companies value profit at the expense of long-term utility to
society. We must be vigilant in recognizing these strategies and advocating for
solutions that will allow companies to accomplish their dual mission: make
reasonable profits and help save and/or improve patients’ lives.”
Blood (www.bloodjournal.org),
the most cited peer-reviewed publication in the field of hematology, is
available weekly in print and online and has been serving the hematology
community for 70 years. Blood is the official journal of the American Society
of Hematology (ASH) (www.hematology.org), the world’s largest professional
society concerned with the causes and treatment of blood disorders.
ASH’s
mission is to further the understanding, diagnosis, treatment, and prevention
of disorders affecting blood, bone marrow, and the immunologic, hemostatic, and
vascular systems by promoting research, clinical care, education, training, and
advocacy in hematology.
blood®
is a registered trademark of the American Society of Hematology. Follow
@BloodJournal on Twitter.
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