How Drug Makers Have Obliterated The Free Market

The fundamental issue is that there is no free market in the drug industry.

It’s been steadily eroded by regulators and lawmakers, often at the behest and to the benefit of drug manufacturers, resulting in their ability to charge prices well over what a competitive market would allow.

Much of the blame for a lack of market competition can also be attributed to a U.S. patent system that is too easily gamed and exploited by drug companies.

As healthcare analyst Shawn Gremminger explains, “when their drugs’ patents and market-exclusivity periods expire, drug companies instead devote enormous energy to maintaining their monopolies through any number of anti-competitive schemes, including ‘patent thickets’, ‘patent evergreening’, ‘product hopping’, and ‘pay for delay’ schemes.

A report from the Initiative for Medicines, Access, and Knowledge found that drug companies have 74 patents apiece on America’s ten best-selling drugs—receiving over half of them after FDA approval.

Consider the patent for Humira, an arthritis drug used by tens of thousands of Americans, that was set to expire in 2016.

As the Republican-controlled House of Representatives investigates the cause of America’s high drug prices, we can only hope that lawmakers aren’t sidetracked by an industry-produced smoke screen intent on distracting from our broken regulatory and patent system.

https://www.aier.org/article/how-drug-makers-have-obliterated-the-free-market-brian-garst/