Rob. You. Blind. How Big Pharma Rigs The Game

Big Pharma uses faux generics to keep prices high

| Drug makers have mastered gaming the system to beat generic competition, critics say.

| Ars Technica – Brand-name drug makers are using “authorized generics” to keep drug prices high and stifle competition, according to a report by Kaiser Health News.

Authorized generics are defined by the US Food and Drug Administration as brand-name drugs that are simply repackaged and marketed without the brand name. They’re made by the same company that makes the brand-name drug and usually sold at a discount relative to the brand-name version.

Traditional generic drugs, on the other hand, are versions of a drug that are equivalent to a brand-name drug in active ingredients and effects but may have slight variations, such as in inactive ingredients like fillers and flavors.

Generics are made by different companies from those that make the brand-name versions.

High-profile examples of authorized generics include Mylan’s cheaper form of its EpiPen, a life-saving epinephrine autoinjector that curbs deadly allergic reactions. In 2016, under political and public pressure to lower drug prices, Mylan introduced the authorized generic of EpiPen priced at $300 for a two-pack.

That’s half the price of a two-pack of the brand-name version, which has a list price of around $600. But it’s still a staggering hike from EpiPen’s original cost of around $50 per injector in 2007. That year, Mylan bought the rights to EpiPen and then raised the price more than 400% in the years that followed. The authorized generic is essentially triple the price of what two injectors used to cost.

Drug companies argue that because authorized generics are priced lower than brand-name drugs, the faux generics lower overall prices and spur competition.

But critics note that the prices can still be inflated, as in the EpiPen case.

Moreover, because brand-name drugs’ list prices are often subject to rebates and discounts by middlemen, the authorized generics’ lower prices sometimes have no impact on how much drug companies net for their drugs.

Tricks and games

Another example is Eli Lilly’s authorized generic form of Humalog insulin, as Kaiser Health News points out … Read more. 


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