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What if I told you that major pharmaceutical companies had paid off their competition to delay the release of lower-cost generic drugs for 20 major pharmaceuticals? And that combined, brand name drug companies made an estimated $98 billion in total sales of these 20 drugs while the generic versions were delayed? Unfortunately, it’s true, and it means that too many sick Wisconsinites either can’t afford the prescription medication they need, or are paying 10 times too much.
Last month a U.S. Supreme Court decision cast a spotlight on unfair and anti-competitive practice, called "pay for delay," in which Big Pharma pays off the competition to delay low-cost generics from coming to market. The case brought much-needed attention to the problem, and the ruling opened the door for drug companies to get sued over these payoffs, but that’s not enough.
Since the court chose not to declare all such payoffs unlawful, it’s now up to Congress to pass legislation to put a stop to the practice. Until pay for delay is banned outright, people who need medication will be stuck paying the price.
In other words, people in Wisconsin either pay inflated drug prices or go without necessary medication. Just so Big Pharma can keep prices sky high.
A report released July 11 by WISPIRG and Community Catalyst found that Wisconsinites with cancer, heart disease, epilepsy and other conditions have been forced to pay an average of 10 times more than necessary for at least 20 blockbuster drugs, and as much as 33 times more.
Pay-for-delay deals have postponed as many as 142 generics from coming to market, according to Federal Trade Commission reports. But since the details of these deals rarely become public, consumers have been largely kept in the dark.
For example, in the case of Tamoxifen, people with breast cancer waited nine years for generic competition to bring down the cost of this drug, a widely used treatment for hormone-receptive breast cancer, due to a pay-for-delay deal. People with high cholesterol pay as much as $205 for a 30-day supply of Lipitor. Now that the generic version is available, it costs $18. While the generic was delayed, Pfizer made $7.4 billion on sales of Lipitor in the last year alone.
Pay-for-delay deals are currently blocking generic versions of at least five drugs: Aggrenox (stroke prevention), Niaspan (high cholesterol), AndroGel (synthetic testosterone), Nuvigil (narcolepsy), and Nexium (heartburn and GERD — gastroesophageal reflux disease).
There is bipartisan support for ending pay for delay. Sens. Amy Klobuchar, D-Minn., and Chuck Grassley, R-Iowa, are sponsoring the Preserve Access to Affordable Generics Act. The bill declares that pay-for-delay deals are presumed anti-competitive and unlawful, and it authorizes the FTC to enforce the law by initiating proceedings against companies that participate in such deals.
Sens. Al Franken, D-Minn., and David Vitter, R-La., are sponsoring the FAIR Generics Act. The bill would reduce the incentive for generic and brand name drug companies to make pay-for-delay deals by letting a second generic drug company enter the market if the first generic company takes a pay-for-delay deal.
The issue for Congress is simple: Stand up for Big Pharma or stand up for consumers. In the face of massive lobbying from Big Pharma — they spent $2.6 billion over the past 15 years, more than Big Oil — it will take lots of public action to win change. Contact Sens. Ron Johnson and Tammy Baldwin, and tell them to stand with Wisconsin consumers and co-sponsor both the Preserve Access to Affordable Generics Act and the FAIR Generics Act.
Bruce Speight is director of WISPIRG, is a nonprofit, nonpartisan public interest advocacy organization.
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