Recently the Supreme Court agreed to hear a case that will determine if brand-name drug companies can continue to pay generic prescription drug companies to keep their products off the market.
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"Insight Journal" reports that many of the active ingredients in prescription drugs are manufactured overseas, and that the pharmaceutical industry earns from 2,809 percent markup of the cost of active ingredient in Zestril, to as much as 570,000 percent markup in Xanax; the markup for Xanax is based on a consumer price of $137.79 for 100 tablets and $0.024 for the cost of the active ingredients.
I’m particularly interested in this case because of legislation I’ve introduced with Senator Herb Kohl of Wisconsin that would deter these “pay-for-delay” settlements when brand name drug companies settle patent disputes by agreeing to pay generic drug manufacturers in exchange for the promise of delaying the release of the generic version of a drug into the market.
These agreements hurt consumers who don’t have access to affordable medications, and they hurt taxpayers who pay for prescription drugs for federal health care programs. That’s because these deals keep the price of prescription drugs high and reduce consumer choice. The Congressional Budget Office estimates that our legislation would generate $4.785 billion in federal budget savings between 2012 and 2021, and would reduce total drug expenditures in the United States by nearly $11 billion over the same decade.
This is nothing to sneeze at. These kinds of agreements put the companies’ interests above the interests of consumers. The Supreme Court’s decision to put this on its docket is a positive step forward while I continue to press for my legislation.
