It’s the biggest lawsuit you might not know anything about: Generic drug companies stand accused of running a “cartel” that rigged the market and fixed prices, costing patients and taxpayers, according to a complaint that has been joined by almost every state’s attorney general.
The scope just keeps getting bigger: The litigation started by focusing on two drugs but has since expanded to implicate 16 companies and more than 300 drugs, Connecticut Attorney General Joseph Nielsen, who has led the effort, told the Washington Post.
“This is most likely the largest cartel in the history of the United States,” Nielsen told the Post’s Christopher Rowland. Not mincing words.
We’ll run through the juicy details in a minute. But it’s worth stepping back and fully appreciating, if the states’ allegations are true, how thoroughly these drug companies have bastardized a system that is supposed to bring down drug prices.
How the generic drug market works — or is supposed to work — in America
Generics are the primary means of lowering drug costs in America. In the United States, if a company develops a new drug, we reward it by giving it a monopoly. New drugs are protected by patents for several years, and the company can set whatever price it wants, absent the discounts negotiated by health insurers or mandated for government programs.
But after a while, the patent expires. That’s where generics come in: They can start offering their own version of the new drug, medically equivalent but available at a much lower price. As more generic competitors enter the market, the price continues to decline.
This system frequently has the desired effect. When there are multiple generic competitors, the price typically falls to 20 percent or less of what the brand-name version originally sold for. Generic drugs account for 90 percent of the prescriptions …read more
Source:: Vox – All