On October 1, Matrix Global Advisors’ CEO Alex Brill joined POLITICO health care contributor and podcast host Carol Vassar for a conversation about his recent reports for CAPD (“Gamesmanship and Other Barriers to Drug Competition” and “The Cost of Brand Drug Product Hopping”) exposing the ways drug companies abuse the patent and regulatory systems to delay competition and keep their prices high. The conversation was for a segment sponsored by CAPD to kick off a POLITICO virtual event on drug pricing.
Carol began with an overview of the issue of competition in drug pricing. She discussed how the Hatch-Waxman Act of 1984 established a framework for balancing innovation and competition and how over the years, drug companies have found ways around Hatch-Waxman in order to extend their own competitive advantages and monopoly profits.
Alex walked through how competition is so crucial for driving savings for patients and the tactics drug companies use to prevent and delay the entry of timely generic competition so that they can keep their monopoly pricing power for longer. These tactics include patent thickets, “orphan” drug designation and product hopping — the focus of Alex’s second report for CAPD published just last month. This report found that just five product “hops” cost patients and the U.S. health care system $4.7 billion each year.
That is a lot of money – but what is the tangible effect on patients? “We are talking about higher out-of-pocket costs at the pharmacy,” Alex explained.
The stakes are high for policymakers to take action to stop this anticompetitive behavior and realize billions in savings for American patients and the health care system. Alex talked through some of the steps policymakers could take right now to address these patent abuses and other gamesmanship tactics from drug companies, including changes to the patent system and empowering the Federal Trade Commission (FTC) to bring antitrust suits against brand drug companies for product hopping.
Check out the full video from the event to hear more from Alex on his findings.