Health care and the broken US health care system are big topics right now. We’re in the middle of an election year, and more and more Americans fed up with rising prices on health insurance, prescription drugs, and medical services in general. Health insurance companies claim that they’re barely scraping by and that the dramatic premium increases are necessary to keep up with the increasing cost of medical care. So what is driving up the cost of health care so much? Insurance companies regularly cite the increasing cost of prescription drugs among the factors. How lovely to see that the pharmaceutical industry is doing everything it can to make sure that those prices remain high for as long as possible. During 2007, there were 14 deals reached between brand name drug makers and generic drug makers to delay the release of specific generic drugs into the market. The brand name companies paid the generic companies to keep the generic drugs under wraps a little longer.
The Colorado Health Insurance Insider has written about this practice before. But I didn’t know how common it was. In the light of all the woes our health care system is facing – including exorbitant costs compared with the rest of the world, and limited access due to such a large chunk of the population without health insurance – deals like these should be illegal. How does this not somehow fall under anti-trust laws? It’s obvious that paid agreements between two companies to delay the release of much less expensive drugs is bad for the consumers. It’s bad for health insurance companies that have to go on paying the higher prices for the brand name drugs, and it’s especially bad for uninsured patients (or those without good prescription coverage) who may not be able to afford the brand name drug at all.
The Federal Trade Commission is opposed to deals that block the release of generic drugs, but they haven’t had much success in stopping the practice. There’s a bill in the Senate to ban the “reverse payments” from brand name drug makers – Barack Obama is a co-sponsor – but it hasn’t gotten very far because of enormous pressure from the pharmaceutical industry. And we wonder why – as the richest country in the world – we’re ranked 37th by the World Health Organization in terms of our health care system’s overall cost, coverage, and quality.
