The Prices We Pay for Delay

by Gabriel Levitt, Vice President, PharmacyChecker.com and Sam Werbalowsky, Pharmacychecker.com | Aug 9, 2013 | Advocacy, Drug Importation, Drug Prices

Brand name drug manufacturers made an estimated $98 billion in sales over the past eight years by paying generic manufacturers to postpone selling low-cost generic drugs, according to a new report released by the U.S. Public Interest Research Group (PIRG). These “pay for delay” deals were recently the focus of a U.S. Supreme Court decision in which the Court ruled that companies engaging in them could be prosecuted under anti-trust laws.

PIRG’s analysis found that pay for delay agreements postponed market entry of generic drugs for an average of five years. It also found that the prices for delayed generics were on average ten times less than their brand-name counterparts.

Americans are too often victims to these higher brand name drug prices, especially those who pay for their drugs out of pocket. For example, the antidepressant Effexor XR costs $194 for a 30 day supply. Venlafaxine, the generic equivalent, costs only $17. Annually, that’s $2,124 cheaper. The venlafaxine pay for delay deal could have cost a consumer $9,983 over its 4.7 year duration.

The extra costs add up quickly. The FTC found in 2010 that these deals add $3.5 billion annually in increased healthcare costs for consumers and taxpayers, not to mention the negative health outcomes of some people skipping medication because of high costs.

We hope the Supreme Court decision will encourage the FTC to challenge and put an end to anticompetitive tactics by drug companies. In the meantime, as Americans wait for domestic action, they can find much lower cost brand medication in Canada and other international pharmacies by comparing prices on PharmacyChecker.com.