As if you didn’t already think the pharmaceutical industry was taking advantage of all of us, wait until you read this report.  According to an article published in Blood, pharmaceutical companies are using several strategies to keep affordable generic drugs off the market and inaccessible to patients, forcing everyone to buy they high-priced, brand-name versions.

One out of five Americans say they do not fill their prescriptions because the cost is too high, some paying more than $100,000 a year for their medications.  Let’s look at how generic drugs make their way into the market, and what the pharmaceutical companies can do to keep it from happening.

By law, once a brand-name drug patent expires, generic drugs can enter the market with the same efficacy and safety as the brand-name original formula.  Generic drugs have saved the health system almost $1.5 trillion from 2004-2013.  So the big pharmaceutical companies found a loophole, several actually.

Pay For Delay

Sometimes generic versions of an expensive drug never make it to the market.  Sometimes that’s because the company developing the generic version was paid to delay its entry into the market.  Yes, you read that right.  The company that owns the patent for the brand-name drug pays a generic company NOT to enter the market (and provide an affordable option).  According to the Federal Trade Commission, this single tactic costs taxpayers and insurance companies around $3.5 BILLION a year.

Brand-name Generics

Another technique patent-holders utilize is to create their own ‘generic’ brand of the drug, but they don’t enter the market with it just yet.  The ‘generic’ version will provide consumers an identical product with a very small savings but the real reason they do it is because that ‘generic’ version is an ace up their sleeve.

They’ll promise the real generic company that they won’t release their ‘generic’ (and cheaper) version as long as the real generic company delays entry into the market.

Attorneys And Marketing Firms

Pharmaceutical companies will often spend more on advertising their brand then they did on developing it.  They’ll pay attorneys to keep cheaper drugs from other countries out of the hands of patients, even though they are 20-50 percent of what they’re forced to pay in the U.S.

Buyout The Competition

Yet another tactic is to buy out a competitor and then raise the price of the generic drug.  We saw this in the news recently with Daraprim.  This 62-year-old drug is the go-to drug for life-threatening parasitic infection patients.  It cost $13.50 per tablet, until it was acquired by Turing Pharmaceuticals who jacked the price up to $750 a tablet – overnight.  Read all about it here.

The Old Switcharoo

Are you ready for the tail-wagging-the-dog-secret-undercover-spy-conspiracy-theory-best-marketing-team-in-the-world stuff now?  That’s right, by creating a ‘new and improved’ version of their own drugs (changing things like dose which offers no advantage to patients), they’re able to keep the generic drug makers out of the business by simply dumping a huge marketing budget on the newly created (yet basically just the same) drug, getting doctors and patients to switch.  Pharmacists can’t substitute with generics because state laws only allow substitution if certain characteristics aren’t changed, like dosage.

So they make a new drug, that really isn’t a new drug, but nobody can copy it, because it’s a new drug.  Again, marketing.