Lawmakers Can Add to Bipartisan Momentum for Market-Based Solutions to Foster
Greater Competition to Lower Prescription Drug Prices





 



CSRXP: HELP COMMITTEE SHOULD REJECT BIG PHARMA’S DEBUNKED INNOVATION RHETORIC,
FOCUS ON IMPROVING COMPETITION TO HIGH-PRICED BIOLOGIC BLOCKBUSTERS

Lawmakers Can Add to Bipartisan Momentum for Market-Based Solutions to Foster
Greater Competition to Lower Prescription Drug Prices



Washington, D.C. – The Campaign for Sustainable Rx Pricing (CSRxP) released a
statement Tuesday ahead of a hearing on Wednesday titled “The Future of
Biotech: Maintaining U.S. Competitiveness and Delivering Lifesaving Cures to
Patients” in the U.S. Senate Committee on Health, Education, Labor and Pensions
(HELP).



“Big Pharma’s egregious pricing practices and anti-competitive tactics are the
root cause of out-of-control drug prices,” said CSRxP executive director Lauren
Aronson. “As Members of the Committee meet to discuss the biotechnology
marketplace, we encourage them to add to the bipartisan momentum for
market-based solutions to boost competition to high-priced brand name drugs,
particularly by fostering greater biosimilar competition.”



“Lawmakers must also reject Big Pharma’s debunked arguments that solutions to
increase competition and lower prescription drug prices could undermine
innovation,” Aronson continued. “These arguments are a red herring meant to
maintain the status quo, or even hand big drug companies greater power to game
the system, keep prescription drug prices high and boost profits, without
improving innovation into new cures.”



Get a Dose of Reality on case studies in pharmaceutical companies’
anti-competitive practices on high-priced biologic blockbusters and Big
Pharma’s innovation rhetoric below.



CASE STUDIES IN BIG PHARMA’S BIOLOGIC GREED



Big Pharma commonly applies an anti-competitive playbook to top money makers
to delay market entry from more affordable alternatives, like generics or
biosimilars. This playbook has been particularly applied to blockbuster
biologic drugs in recent years — delaying biosimilar competition that isproven
<[link removed]>
to lower drug prices and out-of-pocket costs for patients, and costing
American patients, taxpayers and the U.S. health care system billions of
dollars each year. Examples include:

* AbbVie’s Two Decades Of Patent Abuse And Monopoly Pricing on Humira. While
Humira finally faced its first competition in the U.S. starting in 2023, over
the course of its more than 20 years on the market, AbbVie applied for more than
300 patents
<[link removed]>
on Humira, securing more than half of them. Ninety-four percent of the patents
filed on Humira came after the drug was initially approved by the FDA. This
strategy helped block competition for years and generated almost$200 billion
<[link removed]>
for AbbVie. In 2022, the drug brought in moremoney
<[link removed]>
for the company, $21 billion, than all 32 teams in the NFLcombined
<[link removed]>
, $19 billion.


* Amgen’s Patent Thickets On Enbrel Cost Nearly $2 Billion In a Single Year.
Amgen built an extensive “patent thicket” around Enbrel, systematically
blocking biosimilar competition until at least 2029 and enabling more than
thirty years of exclusivity in the U.S. A recentanalysis
<[link removed]>
estimated that these tactics cost the health system $1.9 billion in a single
year by blocking biosimilar competition. While biosimilars launched in Europe
years ago, American patients have continued paying high prices due to Amgen’s
legal and patent abuse strategies designed to maintain monopoly pricing in the
U.S.


* Merck’s Patent Abuse on Keytruda. According to research
<[link removed]>
from I-MAK, Merck has filed for 129 patent applications on Keytruda – more
than half of which were filed after the drug’s initial approval by the FDA. The
Big Pharma company has been granted 53 patents on this one drug alone, and
I-MAK estimates that Americans will spend at least $137 billion on Keytruda
while the drug faces no competition due to its extended exclusivity that
already totals more than eight years – without reflecting the added impact of
the Big Pharma giant’s latest product-hopping strategy on the blockbuster
biologic cancer treatment.
In addition to the impact of Merck’s strategy to further block competition on
Keytruda, the nonpartisan Congressional Budget Office (CBO)released
<[link removed]>
a revised estimate on the impact of The Optimizing Research Progress Hope And
New (ORPHAN) Cures Act, a Big Pharma-backed policy that will help drug
manufacturers keep prices high on blockbuster brand name drugs at the expense
of seniors and taxpayers.



While Merck’s Keytruda was left out of CBO’s original estimate, in its revised
analysis, with Keytruda included the CBO estimates that the impact of this Big
Pharma-backed policy nearly doubled, from $4.9 billion, to $8.8 billion. CBO’s
analysis now also includes several other blockbuster biologic drugs, including
Johnson & Johnson’s cancer drug Darzalex and Bristol-Myers Squibb’s cancer drug
Opdivo.



PRICE HIKES UNCONNECTED TO CLINICAL IMPROVEMENTS



Multiple studies have found Big Pharma’s price hikes have little to no
connection to the cost of its development or improvements in drugs’ efficacy.
In other words, brand name drug companies set launch prices and hike prices to
maximize profits — not because there is any connection to innovation.

* “No Association” Between Drug Company’s Prices And Investments In Research
& Development. A September 2022 paper
<[link removed]> in The
Journal of American Medical Association (JAMA) Network Open examined a subset
of 63 drugs approved by the U.S. Food and Drug Administration (FDA) between
2009 to 2018, representing around one-fifth of the drugs approved by the FDA
during this time span. The researchers found that for this subset of drugs,
“there was no association between estimated research and development
investments and treatment costs based on list prices at the launch of the
product or based on net prices a year after launch.” (“Association of Research
and Development Investments With Treatment Costs for New Drugs Approved From
2009 to 2018,”JAMA Network Open
<[link removed]>,
September 26, 2022)


* No “Meaningful Association Between Cancer Drug Prices And The Magnitude Of
Benefit For Any End Points.” An October 2022 study
<[link removed]> in
JAMA Internal Medicine found a lack of correlation between the prices set by
Big Pharma on cancer drugs and their effectiveness for patients. “We did not
detect a meaningful association between cancer drug prices and the magnitude of
benefit for any of the end points,” the researchers wrote. “This suggests that
cancer drugs are priced based predominantly on what the market will bear.” In
other words, Big Pharma sets prices to maximize profits, not based on clinical
value or outcomes for patients. (“Association Between US Drug Price and
Measures of Efficacy for Oncology Drugs Approved by the US Food and Drug
Administration From 2015 to 2020,”JAMA Internal Medicine
<[link removed]>,
October 31, 2022)


* “A Drug’s Sunk R&D Costs Do Not Influence Its Price.” A 2021 report from
the Congressional Budget Office (CBO) found that pharmaceutical R&D costs do
not have a relationship to the prices drug companies set on their products. The
report concluded, “Importantly, when drug companies set the prices of a new
drug, they do so to maximize future revenues net of manufacturing and
distribution costs. A drug’s sunk R&D costs—that is, the costs already incurred
in developing that drug—do not influence its price.” (“Research And Development
In The Pharmaceutical Industry,”Congressional Budget Office
<[link removed]>, April 2021)


* Big Pharma’s Unjustified Price Hikes On Just Seven Popular Drugs Cost
American Taxpayers $805 Million In Increased Costs. An analysis conducted by
the Institute for Clinical and Economic Review (ICER) found Big Pharma hiked
prices on seven of the top 10 most popular drugs in 2021 with no accompanying
increase in clinical value — increasing overall drug spending by $805 million.
The price of the costliest drug, Horizon Therapeutics’ gout treatment
Krystexxa, increased by 12 percent, raising out-of-pocket spending by $3,210 on
average per patient. The second and third most widely used drugs among Medicare
Part B beneficiaries, Seagen’s cancer drug Adcetris and Ipsen’s injection
Somatuline Depot, both increased costs by $1,000 per patient. (“ICER Identifies
Most Significant 2021 US Drug-Price Hikes Unsupported by New Clinical Evidence,”
ICER
<[link removed]>
, December 6, 2022)


* Price Hikes On AbbVie’s Blockbuster Drug Humira Were Not Supported By
Clinical Evidence And Led To A More Than $1.8 Billion Increase In Unnecessary
U.S. Drug Spending. Price hikes on AbbVie’s Humira were not supported
<[link removed]>
by new clinical evidence and accounted for an unnecessary increase in U.S. drug
spending of more than $1.8 billion from 2017-2018, according to ICER.
(“AbbVie’s Humira, Roche’s Rituxan top ICER’s list of worst price-hike
offenders,”FierceHealthcare
<[link removed]>
, October 8, 2019)
BIG PHARMA INCREASINGLY PURSUING SECONDARY PATENTS, NOT TRUE INNOVATION



Several recent analyses also demonstrate that Big Pharma is increasingly
focused on developing new and more effective strategies to exploit loopholes
and extend monopoly pricing on blockbuster products – instead of investing in
true innovation.

* Just Six Percent Of Drug Patents In Infringement Suits Were For Active
Ingredients Or New Molecules.An analysis conducted in Nature Biotechnology
<[link removed]>
examined 21 patent infringement lawsuits pursued by pharmaceutical companies
on biologic drugs under the Biologics Price Competition and Innovation Act
(BPCIA), covering a total of 179 patents. Of the patent filings examined in the
study, just six percent were for active ingredients or new molecules. The vast
majority were for secondary uses – oftentimes for much less critical changes to
the drugs or their manufacturing process, with little to no innovation involved
that might improve clinical value for patients. (“The Characteristics of
Patents Impacting Availability of Biosimilars,”Nature Biotechnology
<[link removed]>
, January 18, 2022)


* There Has Been A “Whopping” 200 Percent Increase In The Number Of
“Secondary” Patent Filings Pursued By Drug Makers Since 2000.According to
coverage fromSTAT News
<[link removed]>
of an August 2023analysis
<[link removed]> in JAMA,
“there has been a whopping 200 percent increase in patents filed by companies
that made few substantive changes to their drugs.” According toSTAT News
<[link removed]>
, the analysis published in JAMA found that from 2000 to 2015, “The ratio of
continuation patents increased from 0.6 for drugs that were approved in 2000 to
1.8 for drugs approved in 2015,” or a 200 percent increase. Meanwhile, “the
ratio of the number of original patents for each FDA approval increased by just
15 percent.” (“More Drugmakers Are Filing Continuation Patents That Sideline
Generic Competition,”STAT News
<[link removed]>
, August 8, 2023)


* The Ratio Of The Number Of Patents For Each Drug In The FDA’s Orange Book
Increased By 68 Percent In 15 Years. According to coverage from STAT News
<[link removed]>
of the same August 2023 JAMAanalysis
<[link removed]>, the ratio of
the number of patents for each drug listed in the FDA’s Orange Book, “increased
from 1.9 for those approved in 2000 to 3.2 for those approved in 2015.” This
amounts to a 68 percent increase in the number of patents on each drug,
underscoring Big Pharma’s increasing focus on pursuing patents to protect
profits and block competition. (“More Drugmakers Are Filing Continuation
Patents That Sideline Generic Competition,”STAT News
<[link removed]>
, August 8, 2023)
Policymakers must see through the pharmaceutical industry’s smoke and mirrors
excuses and debunked rhetoric and enact market-based solutions that hold brand
name drug makers accountable and lower prescription drug prices.



Read more on Big Pharma’s innovation rhetoric HERE
<[link removed]>
.



Read more on bipartisan, market-based solutions to hold Big Pharma accountable
HERE <[link removed]>.



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