The Big Pharma Tactic That Costs Consumers

Drug manufacturers and consumer advocates are waging a battle in court that could help determine how much you pay for medications.

The Big Pharma Tactic That Costs Consumers Photo (cc) by Key Foster

Drug manufacturers and consumer advocates are waging a battle in court.

At stake is the lifespan of drug patents that allow pharmaceutical companies to charge higher prices, potentially costing consumers millions of dollars.

A tactic known as “product hopping” allows drug manufacturers to extend their patents on drugs and thus prevent competitors from creating cheaper generic equivalents, Consumer Reports explains.

For example, a decade ago, a cheaper generic version of the antibiotic Doryx (doxycycline) was about to emerge. Doryx’s manufacturer, Warner Chilcott, stopped making the drug in its original capsule form and started making it in tablet form, according to Consumer Reports.

That action prevented the company Mylan from being able to release a generic tablet version of the medication.

Such actions by Warner Chilcott (which was acquired by Actavis in 2013) are now the subject of a lawsuit.

A federal court judge sided with Warner Chilcott in April, stating that it did not violate anti-trust laws. But Mylan is appealing that verdict — with support from national consumer-advocate organizations like Consumers Union, the policy and advocacy arm of Consumer Reports.

A legal brief associated with the case explains:

“Product hopping … has become a well-known tactic in the pharmaceutical industry that prevents generic medication from competing in the marketplace. Without generic competition, name-brand manufacturers continue to reap higher profits and consumers pay higher prices.”

As this legal battle wages on, consumers hoping to reduce their prescription costs have other options. Online pharmacies can save you money, but you need to choose wisely.

For more, check out the Money Talks News stories “Online Pharmacies: What You Don’t Know Could Kill You” and “Should You Use an Overseas Pharmacy?

What’s your take on pharmaceutical companies’ practices like product hopping? Sound off in our Forums. It’s the place where you can speak your mind, explore topics in-depth, and post questions and get answers.

Karla Bowsher
Karla Bowsher
I’m a freelance journalist and former newspaper reporter who has covered both personal and public finance. I've worked for a top 50 major metro daily and a community newspaper as well as ... More


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