Legislation would deter product hopping to make drugs more affordable
WASHINGTON – Sens. Chuck Grassley (R-Iowa), John Cornyn (R-Texas), Richard Blumenthal (D-Conn.) and Dick Durbin (D-Ill.) introduced the Drug Competition Enhancement Act to spur generic and biosimilar marketplace competition. By prohibiting branded drug manufacturers from engaging in ‘product hopping,’ the bipartisan legislation will help lower drug prices for patients.
“One of my top priorities in the Senate is reducing the cost of prescription drugs. Our bill will bring much needed transparency to drug pricing by cracking down on product hopping and giving Iowans more access to lower-cost generic drugs,” Grassley said.
“Companies who attempt to profit at the expense of Texans’ health must face consequences. By rooting out this wrongdoing and holding bad actors in the pharmaceutical industry accountable, this legislation would spur competition in the marketplace and make drugs more affordable for patients who depend on them,” Cornyn said.
“Bad actors in Big Pharma have manipulated the rules and prioritized profits over patients—including by encouraging consumers to switch medications for pharmaceutical companies’ gain and leaving Americans stuck paying sky-high costs,” Blumenthal said. “The Drug Competition Enhancement Act reigns in these monopolistic practices and facilitates competition and market entry. This legislation lowers costs for consumers and puts patient care at the forefront.”
“Americans shouldn’t be forced to choose between their wallets and their health. But because Big Pharma games the patent system, too many patients face sky-high prescription drug costs,” Durbin said. “The bipartisan Drug Competition Enhancement Act would prevent pharmaceutical companies from using anti-competitive tactics to keep affordable medications out of reach for patients.”
Background:
Some pharmaceutical manufacturers deliberately prevent potential competitors from entering the marketplace using product hopping. This occurs when a bad actor’s exclusive right to a drug is about to expire, but they do not want to compete with generic alternatives. Instead, companies manipulate the market to move patients from the old drug onto a new one.
Pharmaceutical manufacturers “hop” patients from branded product to branded product by engaging in a variety of practices to disadvantage their old drug, including destroying the inventory of their old drug, pulling it from the market, aggressively raising the price, badmouthing it or even diminishing its safety. Under this practice, it is difficult to switch patients to the cheaper generic when the market protections for the earlier drug expire. This abuse of the patent system forces patients to continue paying high costs for a drug that is substantially similar to their old one for many years to come.
The bipartisan Drug Competition Enhancement Act would put an end to this practice by prohibiting branded drug manufacturers from engaging in anticompetitive product hopping, making it an antitrust violation. Companies engaging in this behavior would risk enforcement action from the Federal Trade Commission. The bill would also facilitate market entry for generics and biosimilars, which drives down drug costs for patients and consumers.
Bill text can be found HERE.