Branded drug makers made billions while blocking generics

  • Makers of brand-name drugs called out by the Trump administration for potentially stalling generic competition have hiked their prices by double-digit percentages since 2012 and cost Medicare and Medicaid nearly $12 billion in 2016, a Kaiser Health News analysis has found.
  • The analysis shows that drug companies that may have engaged in what FDA Commissioner Scott Gottlieb called “shenanigans” to delay the entrance of cheaper competitors onto the market have indeed raised prices and cost taxpayers more money over time.
  • A KHN analysis found that 47 of the drugs cost Medicare and Medicaid almost $12 billion in 2016.

As part of President Donald Trump’s promise to curb high drug prices, the Food and Drug Administration posted a list of pharmaceutical companies that makers of generics allege refused to let them buy the drug samples needed to develop their products.

The FDA listed more than 50 drugs whose manufacturers have withheld or refused to sell samples, and cited 164 inquiries for help obtaining them. Thirteen of these pleas from makers of generics pertained to Celgene’s blockbuster cancer drug Revlimid, which accounted for 63 percent of Celgene’s revenue in the first quarter of 2018.

[inlinetweet prefix=”” tweeter=”” suffix=””]Revlimid cost Medicare Part D $2.7 billion in 2016, trailing only Harvoni, which treats hepatitis C and is not on the FDA’s new list[/inlinetweet]. The cost of Revlimid, which faces no competition from generics, has jumped 40 percent per unit in just four years, the Medicare data show, and cost $75,200 per beneficiary in 2016.

What’s going on here?

Frankly, there are no surprises here.  Drug companies will do everything they can to delay generic competition to blockbuster drugs because they are cash cows and they can rationalize their decisions using the dated argument of “we need the money for R&D”.  Even with rebates the cost of these drugs is still going to be in the billions costing us all more money.

The FDA does little

Publishing a list of offenders is a small first step, but how many people really have the time to research these drugs?  This will be more ammunition for politicians and ensure that the debate on drug pricing stays front and center in the debate around health care costs.