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Massachusetts Consumers Paying 10x Too Much For Common Drugs–MASSPIRG

Thursday, July 11, 2013

 

"Pay-for-delay" deals between generic and brand name drug companies are costing medication consumers to pay 10 times more than necessary for at least 20 popular drugs, according to a report entitled "Top Twenty Pay-for-Delay Drugs: How Drug Industry Payoffs Delay Generics, Inflate Prices and Hurt Consumers," released today by MASSPIRG and Community Catalyst. Some of the drugs highlighted in the report include Lipitor, Zantac, Tamoxifen, Lamictal, Cipro, and Provigil.

These agreements are an industry practice in which brand name pharmaceutical companies pay off generic drug manufacturers to keep lower cost equivalents off the market, forcing consumers to pay higher brand-name drug prices. 

The low-key industry practice is especially troublesome in Massachusetts, said MASSPIRG Legislative Director, Deirdre Cummings. "We have the highest healthcare cost in the nation, and this is driven in part by the cost of drugs. And when the cost of drugs is high, health insurance premiums are kept high." Another reason that this is a serious issue for Mass, said Cummings, is the number of biotech companies in the state competing for the lucrative deals. "It would be too much for one brand name company to pay off four generics to delay the release of a drug." According to the Federal Trade Commission (FTC), pay-for-delay settlements have postponed as many as 142 generic drugs from entering the market, forcing many Massachusetts residents to pay outrageously-inflated prices for their necessary medicaiton, or even go without.

The top 20 list comes just weeks after the U.S. Supreme Court ruled that pay-for-delay agreements may be illegal under antitrust law, opening the drug industry to lawsuits over the deals. However, the Court chose not to declare all such payoffs unlawful, spurring consumer advocates to call on Congress to finish the job and pass legislation to put a stop to the practice.

Pay-for-delay deals have remained under the radar to consumers as details rarely become public, and it is very hard to uncover this information. But once the issue comes into, many are eager to advocate for the elimination of this practice. "When people understand that there are billions of dollars given from one company to another to ensure that consumers spend the most money possible, they say, 'This is outrageous!'" The best way to go about ridding the industry of pay-for-delays is via congressional action, says Cummings. She hopes that Bay State Senators will step up. "Elizabeth Warren is on the health committee that the bill to eliminate pay-for-delay would go through, but she hasn't taken a stance on the issue yet, so we hope that she'll support us on this."

 

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