In the news

The Oregonian
Soumya Karlamangla

Oregonians have paid on average 10 times more for top-selling prescription drugs because of deals between drug manufacturers to delay production of generics.

The 20 top prescription drugs that paid off their rivals to keep generics off the market resulted in average delays of five years that left patients paying up to 33 times as much for brand names, according to a report released Thursday from the Oregon State Public Interest Group and Community Catalyst. The drugs listed include some common prescriptions: Lipitor, Tamoxifen and Cipro.

The report comes in the midst of heightened efforts nationwide to rein in health care costs, including from prescription drugs. The Supreme Court ruled last month that the Federal Trade Commission can sue companies for paying rivals to keep generic drugs off the shelves.

Tom Burns, director of pharmacy programs for the Oregon Health Authority, said that he expects the court ruling will lead to lower prices for consumers as access to generics increases.

Oregon currently bulk purchases prescription drugs with Washingtonto get lower prices, a practice that began in 2006 so the states could offer cheap drugs to those without prescription-drug insurance coverage. Though the states can work out discounts with buying en masse, delays on the generics still make prices higher than necessary.

"If there's an agreement with a drug manufacturer to keep the generic from coming to the market, we can't buy the drug at that price because the drug isn't there," Burns said.

At first, a company is awarded a patent that prevents generics from entering the market to recoup research costs and to encourage innovation. But after the patents expire, some pharmaceutical manufacturers have paid other companies to not produce generics.

Brand name drugs cost significantly more than generics. In 2011, brand-name drugs accounted for 18 percent of the total prescriptions written by doctors but 73 percent of consumer spending, according to IMS Health.

The makers of Lipitor, a popular drug for people with high cholesterol, struck a deal to prevent production of a generic.

Until the deal expired in 2010, people in Oregon paid $4.99 for a 10-miligram tablet of Lipitor, according to a database for drug prices provided by the Oregon Health Authority. Now, the generic – atrovastatin calcium – costs 93 cents for a 10-miligram tablet, which results in a difference of about $1,460 per year per patient.

Jesse O'Brien, OSPIRG healthcare advocate, called these 20 drugs, which includes Lipitor, "just the tip of the iceberg."

There are as many as 142 generics that have been prevented from coming to the market, according to OSPIRG. Five of the 20 drugs listed in the report do not have generics out yet because their pay-off delays have not yet expired, including AndroGel, which treats low testosterone in AIDS and cancer patients.

There are currently two bills in the U.S. Senate looking to reduce these kinds of deals. One would authorize the FTC to initiate proceedings against companies involved in these deals and one would allow a second generic drug company to enter the market if the first takes a deal.

"Oregonians are paying millions of dollars more than they need to," O'Brien said.

Support Us

Your donation supports OSPIRG’s work to stand up for consumers on the issues that matter, especially when powerful interests are blocking progress.

Consumer Alerts

Join our network and stay up to date on our campaigns, get important consumer updates, and take action on critical issues.
Optional Member Code

OSPIRG is part of The Public Interest Network, which operates and supports organizations committed to a shared vision of a better world and a strategic approach to social change.