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Pharma profits from patenting OTC drugs

Written by Diane Archer

Given that taxpayers contribute significantly to both the development of drugs and drug spending, you would think that there would be some federal controls on drug prices. Instead, the US allows drug companies to profit at taxpayer expense in a wide variety of ways, many of which we have described on Just Care. (You can read about Pharma coupons here, Pharma evergreening here, Pharma pay for delay here, Pharma tax breaks here.) Did you know that the US also allows pharmaceutical companies to profit handsomely from patenting OTC (over-the-counter) drugs?

The FDA has approved brand-name prescription drugs that are simply a combination of over-the-counter medications. Put differently, pharmaceutical companies can combine two over-the-counter medications that can be purchased at little cost at the drug store into one patented brand-name prescription that can cost thousands of dollars. And, because doctors can prescribe virtually any drug they please and insurers often have incentives to pay for most drugs prescribed, pharmaceutical companies need only market these drugs to doctors and patients to reap large rewards.

Here are just a few examples of drugs doctors should rarely if ever be prescribing. The vast majority of us should be buying their key ingredients over the counter if we need them:

  • Vimovo: A patented drug from Astra Zeneca, which was purchased by Horizon Pharma, that can cost over $3,000 a prescription, even though you can buy naproxen (Aleve) and esomeprazole magnesium (Nexium), its two key ingredients, over the counter for about $40. Marshall Allen reports in The Atlantic that Vimovo’s net sales have exceeded $455 million since 2014.
  • Duexis: A patented drug from Horizon Pharma for arthritis and ulcers that can cost $1,435 a prescription, even though you can buy its two key ingredients, ibuprofen (Advil) and famotidine (Pepsid), over the counter at little cost. Horizon Pharma offers an online coupon, which buys down people’s cost for the drug to as little as $0, to encourage people to use it rather than the low-cost OTC drug alternatives. Allan further reports that Duexis’ net sales have exceeded $465 million.
  • Treximet: A patented drug from GlaxoSmithKline for migraines that can cost $822 a prescription, even though you can buy its two key ingredients sumatriptan and naproxen over the counter at little cost. Glaxo offers an online coupon to encourage people to buy it rather than the low-cost OTC drug alternatives.
  • Zegerid: A patented drug from Santarus for acid reflux that can cost $2,950 a prescription, even though you can buy its two key ingredients omeprazole and sodium bicarbonate over the counter at little cost. The drug company offers an online coupon to encourage people to buy it rather than the low-cost OTC drug alternatives.

Of course, Pharmacy Benefit Managers (PBMs) and health insurers that want to add value for consumers could refuse to cover these drugs. But, so long as they are getting big rebates from drug makers for making them available to their members, they have a powerful financial incentive to include them on their formularies. In short, so long, as Congress allows PBMs and insurers to collect these rebates, PBMs and insurers likely will make them available, driving up drug spending and adding negative value to our health care system.

If you want Congress to rein in drug prices, please sign this petition.

Here’s more from Just Care:

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1 Comment

  • Doctors can and should help. Years ago my doctor prescribed Arthrotec for my arthritis, then my insurance quit covering it. He researched the ingredients and found that it was a combination of diclofenac and misoprostol which are both prescription meds. I take the combo and it costs me and my insurance a lot less that the $400 I was recently quoted for Arthrotec.

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