In case you missed it, a new article in The Atlantic explains how big drug companies commonly use an anti-competitive tactic, “pay-for-delay,” to prevent more affordable options from entering the marketplace. As the article explains, “brand-name drug companies who hold the patents to blockbuster medications pay other companies to put off introducing generic equivalents. This lets them keep charging high prices.”

The article goes on to explain how pay-for-delay could violate the intent of antitrust laws meant to protect consumers and market forces in the economy:

“Pay for delay is maddening—the sort of thing that makes people say ‘There ought to be a law against this.’ What’s truly maddening, however, is the fact that there already is a law against pay-for-delay deals: antitrust. The original federal antitrust law, the Sherman Act of 1890, outlaws ‘every contract, combination, or conspiracy … in restraint of trade.’ Shouldn’t pay-for-delay agreements be a clear antitrust violation? According to a group of plaintiffs that include prominent HIV/AIDS advocates, the answer is yes.”

The story continues to explain how drug companies have sued rivals for patent infringement, then paid those rivals to stay out of the market:

“This is not how intellectual-property law ordinarily works. If I start a podcast and use a copyrighted song for theme music without permission, the record label won’t pay me to stop. I’m the one who will be forced to pay. Pay-for-delay schemes look like something different: a way to prop up an invalid or expired patent. For the patent holder, it can be cheaper to pay rivals to stay out of the market than it would be to actually compete with them on price.”

“Pay-for-delay” is just one tactic big drug companies use to keep more affordable options, including generics and biosimilars, from entering the market. These egregious practices allow brand name drug companies to extend their monopolies and keep prescription drug prices high.

A recent analysis from the American Economic Liberties Project and the Initiative for Medicines, Access & Knowledge (I-MAK) found that patent abuse, pay-for-delay, and other anticompetitive tactics in the prescription drug supply chain cost patients “an additional $40.07 billion on pharmaceuticals in 2019,” which “equates to an average cost of approximately $120 per year for every American man, woman, and child.”

To lower drug prices, Congress should focus on holding big drug companies accountable and increasing competition in the market. Lawmakers should reject efforts pushed by drug companies to direct attention to other aspects of the supply chain that are working to lower costs. Policies targeting pharmacy benefit companies, for example, will increase drug costs, reduce access to affordable prescription drug benefits, and increase the power of big drug companies to keep drug prices high.

Read a recent blog highlighting what expert witness and lawmakers had to highlight on the root cause of high prescription prices: Big Pharma’s anti-competitive tactics HERE.

Learn more about public policy solutions that would promote competition in the prescription drug market and effectively lower prices for patients HERE.

See PCMA’s guide to understanding the role and value of pharmacy benefit companies HERE.