The same week Big Pharma launched its latest advertising blitz doubling down on a bogus blame game designed to evade accountability, the industry’s most potent giants had to answer to blowback from their own investors over the patent abuse and price-gouging practices that are the root cause of high drug prices.
Investors forced Big Pharma giants, like AbbVie, Pfizer and Eli Lilly, to allow votes on governance proposals at annual shareholder meetings that seek to examine the affordability and reputational effect of patent abuse that blocks competition.
Big Pharma’s greed and power will keep the proposals from passing. But that a significant number of Big Pharma’s investors are speaking out against the effect of their anti-competitive practices should serve as a potent reminder for everyone: Out-of-control drug prices start and end with Big Pharma.
And so, as Big Pharma races ever more boldly to the bottom with hyperbolic and debunked rhetoric pointing the finger at others, it is critical lawmakers aren’t distracted from brand-name drug companies’ continuing profiteering at the expense of American patients and keep their eye on solutions that will effectively lower prescription drug prices by holding Big Pharma accountable.
While Big Pharma seeks to divert attention and evade accountability, brand-name giants have plowed ahead with a business-as-usual approach to undermining competition and price-gouging patients.
Merck recently announced plans to pursue additional patents on its blockbuster cancer drug Keytruda, which brought in more than $17 billion for the Big Pharma company in 2021. According to research from the Initiative for Medicines, Access & Knowledge (I-MAK), Merck has already filed 129 patent applications on Keytruda — more than half of which were filed after the drug’s initial approval by the FDA.
Merck’s plan is just one example of how Big Pharma games the system to extend monopolies on blockbuster products — filing patents for changes such as intake method or dosage that don’t represent truly new innovations or improve clinical benefits for patients. This enables Big Pharma to add to patent thickets designed to block competition from more affordable alternatives, keep drug prices high and boost profits.
I-MAK estimated Americans will spend at least $137 billion on Keytruda while the drug faces no competition due to its extended exclusivity before considering the added effect of the Big Pharma giant’s latest patent strategy.
A separate analysis, released in January, found the one-year cost of delayed competition caused by Big Pharma’s patent thickets on just five popular prescription drugs ranges from $1.8 billion to $7.6 billion.
Blocked competition and extended monopolies continue to fuel price increases on existing products. In just the first two weeks of the year, Big Pharma hiked prices on nearly 600 brand-name prescription drugs, including 16 brand-name drug companies whose price hikes exceeded 10 percent.
Big Pharma has also increasingly ratcheted up the prices set on new products to further supercharge profits at the expense of American patients and the U.S. healthcare system.
A March report from The Wall Street Journal exposed how brand-name drug makers are increasingly targeting higher launch prices to circumvent heightened attention around price increases. The analysis found that the median monthly price for a newly approved drug nearly tripled from 2011 to 2022.
A separate analysis from Reuters found Big Pharma set a record for out-of-control launch prices last year, with the median annual price among drugs newly approved by the Food and Drug Administration in 2022 exceeding $200,000.
To lower prescription drug prices, lawmakers should advance bipartisan, market-based solutions that will crack down on anti-competitive tactics, make more affordable alternatives available for patients and shine a light on the worst price-gouging behavior.
Lawmakers from both sides of the aisle made positive progress earlier this year by advancing the Affordable Prescriptions for Patients Act of 2023 as part of a package of legislation targeting Big Pharma’s anti-competitive tactics in the Senate Judiciary Committee. This legislation previously won strong bipartisan support in Congress and would crack down on Big Pharma’s egregious patent abuse tactics that block competition from more affordable alternatives, such as patent-thicketing and product-hopping.
Congress should also advance solutions to boost list-price transparency so policymakers and the public can access clear and transparent information about the actual costs of treatment, how manufacturers set prices and the cost of bringing drugs to market, particularly for high-cost drugs.
The Fair Accountability and Innovative Research Drug Pricing Act, recently reintroduced in the Senate by Tammy Baldwin, D-Wisconsin, and Mike Braun, R-Indiana, is a positive example of bipartisan, market-based legislation that would help hold Big Pharma accountable and expose egregious pricing practices.
Brand-name drug companies alone seek and extend monopolies and set prices on the medications in their portfolios. Congress cannot deliver lower prescription drug prices for patients without focusing on the root cause of high prices in the first place — and holding Big Pharma accountable.
