(Washington, D.C.) — The Pharmaceutical Care Management Association (PCMA) today released a new report, “Drug Manufacturer Strategies for Keeping Drug Costs High,” on pharmaceutical industry pricing tactics that increase prescription drug costs for patients.

The report, conducted by the research firm Visante, examines certain drug manufacturer anti-competitive tactics that affect many different types of prescription drugs. For example, some manufacturers of specialty drugs, which include many cancer medications, and orphan drugs employ tactics to take extra advantage of government-established monopoly status and exclusivity. In 2017, 80% of prescription drugs approved were specialty and orphan drugs, doubling from just 40% of approvals in 2001. Currently, the average launch price for drugs in these categories is more than $200,000 per patient per year.

The Visante report found that average list prices for specialty and orphan drugs have doubled over the past 12 years, and prices increase at much faster rates than do those for traditional drugs. For example, among the nine oral cancer drugs on the market in 2016, the average list price for a month’s supply was $10,664. In 2020, the average list price for a month’s supply of the 45 oral cancer drugs then on the market was $17,454, an increase of 64%.

“As Congress and the Biden administration examine drug pricing reforms, the findings uncovered in this report should serve as an impetus to eliminate anti-competitive practices, including patent and exclusivity abuses. The key to addressing drug prices is to generate more competition in the marketplace, and PCMA supports a number of policies that support competition, value, and affordable access to drugs for patients,” said PCMA President and CEO JC Scott. “Pharmacy benefit managers have a proven track record of lowering drug costs for patients by leveraging competition to lower costs. By addressing the patent and exclusivity practices that limit competition, policymakers can unleash market forces and reduce costs.”

The Visante report highlights numerous anti-competitive drug manufacturer strategies that prevent generic and biosimilar competitors from entering the market and lead to increased spending for programs and patients.

• Using authorized generics and citizen petitions to fend off competition. Some drug manufacturers utilize a variety of patent strategies to extend their patent protection beyond the initial 20-year period.
• Delaying generic/biosimilar competition by abusing the patent system. Under this strategy, manufacturers create “patent thickets” by filing additional patents on the same drug after the drug is approved by the U.S. Food and Drug Administration (FDA).
• Abusing patent and other market exclusivity systems to block generic/biosimilar competition. Market exclusivity rights are statutorily granted by the FDA upon approval of a drug that provide the brand drug with protection from generic competition for a limited amount of time.
• Promoting high-priced drugs through payments to physicians and patient coupons. Manufacturers use coupons and copay cards to incent patients to use high-priced drugs despite the availability of less expensive, equally effective alternatives, leading to greater high-priced drug utilization and higher overall costs. The prices for brand drugs with coupons, which often are those with generic competition, are rising 12-13% every year, compared to 7-8% increases for brand drugs without coupons.

PCMA recently issued a new three-part policy platform for lowering prescription drug costs that includes proposals to increase competition, modernize Medicare Part D, and promote innovative ways to pay for high-cost drugs through value-based arrangements.

Please visit PCMA’s website to view:  “The Critical Path Forward: Rx Policies to Reduce Costs, Improve Access.”

Click here to see a new infographic, “PCMA Supports Straightforward Solutions to Reduce Drug Costs.”

In addition, PCMA supports the following legislation that would increase competition and reduce prescription drug costs for patients.

• H.R. 2883: the “Stop Stalling Access to Affordable Medications”
• H.R. 2891: the “Preserve Access to Affordable Generics and Biosimilars Act”
• H.R. 2873: the “Affordable Prescriptions for Patients Through Promoting Competition Act of 2021”
• H.R. 2884: the “Affordable Prescriptions for Patients Through Improvements to Patent Litigation Act”

PCMA also supported passage of “The Ensuring Innovation Act” and the “Advancing Education on Biosimilars Act of 2021.”

###