FTC says increased generic drug competition will save us billions
We all know that generic drugs are much cheaper than brand-name drugs. The reason is simple: generic drugs create competition in the market. Until there is generic competition, the brand-name drug manufacturer can charge whatever it wants, because it has a monopoly on the product — and in many cases on the whole drug category.
After competition is introduced, the free market sets the price, and prices come down — dramatically.
I know that you know this. But what I bet you didn’t know is that brand-name drug manufacturers are currently allowed by law to pay generic drugmakers to stay off the market — to not compete. That’s good for the drug companies — they all make money — but bad for consumers, because it means we still have to pay inflated, monopoly prices.
Fortunately, it looks like legislation is on the way to correct this glaringly anti-competitive practice, and in the process save American consumers billions of dollars.
A bill currently before Congress, the Preserve Access to Affordable Generic Drugs Act, would prohibit brand-name drug manufacturers from using pay-off agreements to keep cheaper generic equivalents off the market.
Earlier this week, FTC Chairman Jon Leibowitz said that putting an end to these pay-for-delay deals would save Americans $3.5 billion a year.
According to U.S. Senator Herb Kohl, who introduced the bill:
We cannot profess to care about the high cost of prescription drugs, while turning a blind eye to anti-competitive backroom deals between brand and generic drug companies that only serve the companies involved.
Please contact your Congressman and Senator to tell them you support the Preserve Access to Affordable Generic Drugs Act!
