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AHIP Files Amicus Brief Targeting Anticompetitive “Product Hopping” Practices By Drug Companies

posted by Clare Krusing

on February 25, 2015

For Immediate Release

Washington, D.C. – Consumers will bear the unfair burden of higher drug prices if pharmaceutical companies are allowed to artificially prolong drug patents in order to avoid competition from generics, according to America’s Health Insurance Plans (AHIP), which filed an amicus brief in support of New York Attorney General Eric Schneiderman’s case before the U.S. Court of Appeals for the Second Circuit.

The antitrust lawsuit argues that drug manufacturer Actavis intentionally altered its Alzheimer’s drug (Namenda IR) just enough to replace the old version before its patent expiration. Such a move would block any new competition, specifically generic equivalents, from the market. As AHIP noted in its brief, such coercive conduct eliminates consumer choice, restrains competition, and raises the cost of pharmaceuticals for consumers.  According to the brief:

“As the facts of this case show, it is often relatively simple for a brand name drug manufacturer to redesign a groundbreaking drug in a way that allows a new version to be patentable even though it does not fundamentally change the drug’s therapeutic effect. Those minor changes present an opportunity for the brand-name manufacturer to extend its monopoly potentially decades into the future.”

“This case is an example of what happens when drugmakers engage in anticompetitive behavior under the guise of innovation,” said AHIP Vice President Ben Jenkins. “Forcing a product switch to protect a monopoly punishes consumers in the worst possible way by delaying the entry of more affordable prescription drugs into the market.”

Jenkins stated that rising drug prices are driving up costs across the board. A recent study found that in 2014 prescription drug prices increased by 6.4 percent year-over-year, the highest segment increase across the healthcare industry.

“Putting an end to anticompetitive practices will broaden access to more affordable generics and improve value for consumers overall,” Jenkins said.

 

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