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States charge 26 drugmakers with illegally driving up the price of generic drugs

Written by Diane Archer

In America, we lock people up when they don’t respond to a bench warrant issued because they failed to pay their medical bills. We deny people health care based on their ability to pay.  But, there’s little chance we will punish the CEOs of 26 pharmaceutical companies if states prevail and the companies are found to have illegally driven up the price of generic drugs.

Stat News reports that 51 states and territories have charged Pfizer, Novartis, Sandoz, Teva and others with price-fixing, manipulating the market for more than 80 generic drugs. They forced Americans to pay more for their generic drugs. The Connecticut press release explains: “These generic drug manufacturers perpetrated a multibillion-dollar fraud on the American public so systemic that it has touched nearly every single consumer of topical products.”

It’s no surprise that these pharmaceutical companies chose to put their profits ahead of the public good. That’s what they virtually always do. It will be a surprise, however, if the executives in charge of these companies, some of whom are defendants in the case, face more than a slap on the hand. Eight executives have been sued individually.

The states’ allegation is of a “vast, systemic conspiracy” among pharmaceutical companies between 2009 and 2016. The pharmaceutical companies deny it. Novartis has already settled one suit regarding price-fixing of generic drugs between 2013 and 2015 for $195 million.

The US pays two or three times what other wealthy countries pay for drugs because Congress gives drug companies monopoly pricing power, in the form of patents, for brand-name drugs, even when they are variants of drugs long on the market. The generic drug market is supposed to be competitive. But, because of a variety of practices, and alleged price-fixing, generic drug prices are far higher than they should be.

Insurers are sometimes paid well to keep generic drugs off of their formularies. When a drugmaker or Pharmacy Benefits Manager–a middleman–wants to promote particular brand-name drug alternatives, they offer insurers incentives not to put the generic drugs on their formularies. People then do not have access to lower-cost generics unless they pay cash for them.

There are so many ways pharmaceutical companies flout the law in order to drive up their profits with impunity, at a huge cost to Americans. Most of their abuses cannot happen in other wealthy countries because prices for drugs are regulated by the government. Why Congress gives pharmaceutical companies in the US license to set prices for brand-name drugs is beyond comprehension.

The US House of Representatives has passed a bill that would regulate the price of a number of drugs in the US. It’s a start. We need regulation of all drug prices. But, the Republican-led Senate is not considering even the House’s modest attempt to regulate prescription drug prices.

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