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 is proven 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 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 for AbbVie. In 2022, the drug brought in more money for the company, $21 billion, than all 32 teams in the NFL combined, $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 recent analysis 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 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 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 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, September 26, 2022)
- No “Meaningful Association Between Cancer Drug Prices And The Magnitude Of Benefit For Any End Points.” An October 2022 study 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, 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, 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, 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 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, 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 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, 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 from STAT News of an August 2023 analysis in JAMA, “there has been a whopping 200 percent increase in patents filed by companies that made few substantive changes to their drugs.” According to STAT News, 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, 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 of the same August 2023 JAMA analysis, 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, 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.
Read more on bipartisan, market-based solutions to hold Big Pharma accountable HERE.
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