Price-fixing scandal ensnares ‘white-hat’ makers of lower-cost generic drugs

genericfda-237x300To paraphrase what a one-time colleague once wrote about her bosses: Never trust Big Pharma, never trust Big Pharma, never trust Big Pharma. Here’s some of the latest evidence why: Even the industry’s so-called “white hats,” makers of supposedly less expensive and more patient-accessible “generic” drugs, now are ensnared in an ever-expanding investigation of illegal price fixing.

As the Washington Post reported:

What started as an antitrust lawsuit brought by states over just two drugs in 2016 has exploded into an investigation of alleged price-fixing involving at least 16 companies and 300 drugs, Joseph Nielsen, an assistant attorney general and antitrust investigator in Connecticut who has been a leading force in the probe, said in an interview. His comments … represent the first public disclosure of the dramatically expanded scale of the investigation.

Nielsen, saying the subjects of the investigation may created the “largest cartel in the history of the United States,” went on to contend that the wrongdoing, as the newspaper noted, included, “overcharges on common antibiotics, blood-pressure medications, arthritis treatments, anxiety pills and more. … The costs flowed throughout the system, hitting hospitals, pharmacists and health insurance companies. They hit consumers who lack prescription drug coverage and even those with insurance, because many plans have high deductibles and gaps on prescription drug benefits.”

To illustrate how patients have been victimized, the newspaper cited a lawsuit filed by grocers, including Kroger, against the generic drug industry over the asthma drug albuterol. It is a familiar medication long used to ease asthma symptoms. It is sold by Mylan and Sun. Its price skyrocketed recently to $4.70 a tablet from 13 cents not that long ago — a 3,400 percent increase that’s hard to explain or fathom, critics say.

Mylan, Teva, Sun, and Dr. Teddy’s — leading generic makers — have denied wrongdoing and insist that evidence against them is lacking or will clear them of what they describe as false claims.

But prosecutors in the current case, as well as in other investigations and lawsuits, say they have uncovered ample evidence on how makers attend conferences and meetings where they apparently agree on and then coordinate sharp price increases.

This isn’t how the system is supposed to work — it’s just the opposite. Generic drug makers enjoy legal advantages designed to encourage them to produce, distribute, and sell drugs that have been shown to be effective and helpful. These medications also have patents that have expired, meaning they lose value for profit-hungry Big Pharma firms that once advertised, marketed, and promoted them zealously under brand names. Generic makers still can enjoy healthy margins on their products, which, the FDA says, “retain the same high quality, strength, purity, and stability as brand-name drug.”

Scott Gottlieb, the federal Food and Drug Administration commissioner, has led the charge to increase generics in the market, vowing to bring to bear his agency’s clout, for example, to expedite their review and approval, and to assist their makers if they encounter resistance from Big Pharma players who want to delay or block their products to increase the profitability of their prescription meds.

The FDA also took the questionable step of giving generic makers a major holiday gift, withdrawing a proposed rule that affected their product labels — and, in legal terms, effectively gives them sweeping protection from product liability lawsuits over their drugs’ side-effects.

Even as generic makers have won support for their role — which, for example, has helped curb some prices among commonly taken drugs by Medicare users, leading to protections for their products from competition —ire against them also has spiked. That’s because pharmacists, patients, doctors, and hospitals have objected to steady, sometimes eye-popping price increases for old products that are unchanged in their content or manufacture.

In my practice, I see not only the harms that patients suffer while seeking medical services, but also their struggles to access and afford safe, efficient, effective, and excellent medical care, especially at a time when costs are soaring, especially for prescription meds, including those that turn out to be dangerous.

No one disputes that Big Pharma should make a reasonable return on its products. But the industry’s voraciousness for profits and its boundless throwing around of corruptive cash needs to be constrained. Time magazine, for example, has put up a disturbing piece about how makers hook patients into costly drugs by loosely governed direct-reimbursement schemes.

The Atlantic magazine, meantime, takes a deeper dive into the small, petty, and seemingly silly gifts that Big Pharma uses, effectively, to bribe doctors to prescribing select products, notably those with big price tags and high risks. There’s a growing body of research to explain the psychology of why this all works, and how it contributes to big problems, including, how gee-gaws helped to sway doctors to write off-label prescriptions for powerful anti-psychotics for kids to how free pens may have contributed to the nation’s opioid crisis.

It’s unacceptable that Big Pharma expends so much energy on conning us out our hard-earned money and maybe less so on breakthrough therapies, rather than incremental drugs, or on hustling a bigger buck out of familiar and standby-by generics. We’ve got a lot of work to do, and our regulators and lawmakers need to get in front of and oversee this rapacious bunch, not constantly be chasing a trail of their harms.

Patrick Malone & Associates, P.C. listed in Best Lawyers Rated by Super Lawyers Patrick A. Malone
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