WASHINGTON – U.S. Senators John Cornyn (R-TX), Richard Blumenthal (D-CT), Chuck Grassley (R-IA), and Dick Durbin (D-IL) introduced the Drug Competition Enhancement Act, which would spur generic and biosimilar marketplace competition by prohibiting branded drug manufacturers from engaging in “product hopping” to help lower drug prices for patients:

“Companies who attempt to profit at the expense of Texans’ health must face consequences,” said Sen. Cornyn. “By rooting out this wrongdoing and holding bad actors in the pharmaceutical industry accountable, this legislation would spur competition in the marketplace and make drugs more affordable for patients who depend on them.”

“Bad actors in Big Pharma have manipulated the rules and prioritized profits over patients—including by encouraging consumers to switch medications for pharmaceutical companies’ gain and leaving Americans stuck paying sky-high costs,” said Sen. Blumenthal. “The Drug Competition Enhancement Act reigns in these monopolistic practices and facilitates competition and market entry. This legislation lowers costs for consumers and puts patient care at the forefront.”

“One of my top priorities in the Senate is reducing the cost of prescription drugs,” said Sen. Grassley. “Our bill will bring much needed transparency to drug pricing by cracking down on product hopping and giving Iowans more access to lower-cost generic drugs.”

“Americans shouldn’t be forced to choose between their wallets and their health. But because Big Pharma games the patent system, too many patients face sky-high prescription drug costs,” said Sen. Durbin. “The bipartisan Drug Competition Enhancement Act would prevent pharmaceutical companies from using anti-competitive tactics to keep affordable medications out of reach for patients.”

Background:

Some pharmaceutical manufacturers have been deliberately abusing the system to prevent potential competitors from entering the marketplace using tactics like product hopping, which slow the entry of lower-cost alternatives.

Product hopping is a practice that bad actors in the pharmaceutical industry engage in when their exclusive right to a drug is about to expire, but they do not want to compete with generic alternatives. Rather than simply competing on the merits with their old drug and any generic alternative, companies manipulate the market to move patients off the old drug and onto the new. They “hop” patients from branded product to branded product by engaging in a variety of practices to disadvantage their old drug, including destroying the inventory of their old drug, pulling it from the market, aggressively raising the price, badmouthing their old drug, or even diminishing its safety.  Then, when the market protections for the earlier drug expire and a generic or biosimilar alternative comes to market, it is difficult to switch patients to the cheaper generic or biosimilar. As a result of this abuse of the patent system, patients are stuck paying high costs for a drug that is substantially similar to their old one for many years to come.

The legislation would put an end to this practice. It would prohibit branded drug manufacturers from engaging in anticompetitive product hopping, making that practice an antitrust violation. If companies engage in this behavior, they would risk enforcement action from the Federal Trade Commission (FTC). It would also facilitate entry to the market for generics and biosimilars, which drives down drug costs for patients and consumers.