By Diane Bartz
WASHINGTON (Reuters) – Drugmakers have targeted the U.S. market to earn outsized profits from old medicines, according to a report released on Friday by the House Oversight Committee that highlighted Eli Lilly and Co, Novo Nordisk and Sanofi, which control the market for insulin.
The staff report also noted pricing and marketing tactics by Pfizer Inc that helped it earn billions of dollars from its now off-patent pain drug Lyrica.
The report, put out following a nearly three-year probe, took issue with assertions by the pharmaceutical industry that high drug prices were needed to fund innovation and research and development programs.
“The Committee’s investigation also found that companies dedicated a significant portion of their R&D expenditures to research that was intended to extend market monopolies, support the companies’ marketing strategies, and suppress competition,” the report said.
The report, which focused on 12 drugs made by 10 companies, said that Lilly, Novo Nordisk and Sanofi own some 90% of the market for life-sustaining insulin, which was invented in the 1920s.
Medicare, the U.S. government health insurance program for those age 65 and older and the disabled, could have saved more than $16.7 billion from 2011 to 2017 on insulin purchases had it been allowed to negotiate discounts with drug companies, the report found.
“Drug companies have raised prices relentlessly for decades while manipulating the patent system and other laws to delay competition from lower-priced generics,” said Committee Chairwoman Carolyn Maloney in the report.
“These companies have specifically targeted the U.S. market for higher prices, even while cutting prices in other countries, because weaknesses in our healthcare system have allowed them to get away with outrageous prices,” she added.
The high prices have had human costs. More than 40% of insulin-dependent patients surveyed said they rationed their medicine in the previous year, the Colorado attorney general’s office found in a 2020 report.
President Joe Biden’s Build Back Better plan, which passed the House and should come before the Senate this year, includes a provision allowing Medicare to negotiate with drugmakers, although only for a small number of drugs.
The report also found that some pharmaceutical companies engage in what it called “product hopping,” making small tweaks to formulations to get a new patent and then switching patients to the newer, more expensive version. There are bills before Congress to ban product hopping.
Among big-selling insulin products, Eli Lilly raised the price of its Humalog 1,219% per vial since it launched, Novo Nordisk raised the price of NovoLog 627% since launch and Sanofi has raised the price of Lantus 715%, the report found.
The report also found that Pfizer targeted the U.S. market for higher prices for its blockbuster Lyrica, as well as using product hopping to prevent patients from shifting to cheaper, generic versions of the medicine.
Lyrica’s price had gone up 420% since it was approved in 2004, the report said. It had sales of about $2 billion in 2019.
The report also found price hikes of 825% for Teva Pharmaceutical Industries’ Copaxone, 486% for Amgen’s Enbrel, 395% for Novartis’ decades old Gleevec, more than 100,000% for Mallinckrodt’s Acthar, 471% for AbbVie’s Humira and 82% for its Imbruvica, and 255% for Celgene’s Revlimid, now owned by Bristol Myers Squibb.
Most of the drugs mentioned in the report are over a decade old.
(Reporting by Diane Bartz; Editing by Bill Berkrot)
