Aaron Carroll reports on drug companies efforts to avoid competition.
For years, big drug companies have been paying their competitors to keep cheaper generic competition off the shelves. That way the larger company can keep charging really high prices for their drug without competition. The smaller companies get big payoffs, and don’t have to do anything at all. Everyone wins. Well, except the rest of the country:
Last year, the Congressional Budget Office estimated that a Senate bill to outlaw such payments would save the federal government $4.8 billion over 10 years and would lower drug costs in the United States by $11 billion. The legislation remains stalled in the Senate. The federal government is a major buyer of drugs through Medicare and the Department of Veterans Affairs.
Such agreements were just ruled illegal by the Third Circuit Court of Appeals because they are anticompetitive. The drug companies disagree, of course.
The generic producers make a lot of money for doing nothing, and the big pharma companies continue to make large profits on drugs that are off patent. However, for the rest of us, costs go up with no improvement in care. This is just one of the many items that contribute to our health care being the most expensive in the world. This, at least, should be fixable.