How critics say drug companies play 'games' to delay generics

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NEW YORK (CBS) Lawmakers are considering a bill to address what President Trump called a top priority in his State of the Union speech: lowering prescription drug prices. The proposed Creates Act would target what critics say are legal but questionable tactics that drug companies use to delay the introduction of cheaper, generic medications. The FDA commissioner has called the tactics "shenanigans" and "unfair and exploitive practices."

Revlimid is the drug that's keeping retired educator Pam Holt alive, keeping her multiple myeloma blood cancer at bay. Her copay on Revlimid runs $640 a month.

"I don't know how anyone can afford that," she said. "I really don't."

But Holt can't get a generic. It's not because other companies aren't trying to make one, but because critics say Revlimid is one of a number of drugs for which companies are using unfair tactics to stifle generic competition.

"This does not help consumers. They're paying more money than they should be paying," said Michael Carrier, a professor at Rutgers Law School.

Carrier studies what he calls the games drug companies play to protect their profits.

"Those games take many forms. In one form, a brand company will pay a generic to delay entering the market. In another form, it will switch from one version of a drug to another, just trivially different, just to keep generics off the market," Carrier said. "They call it life cycle management. I call it anti-competitive conduct."

Carrier says often, the games involve patents, the government protection that gives companies the exclusive right to sell their drug for 20 years. But drugmakers have found ways to extend those protections much longer. Take the rheumatoid arthritis drug Humira. That one drug generated $18 billion for manufacturer AbbVie last year. But its original patent was expiring in 2016. So to protect it, Carrier says AbbVie built what's called a "patent thicket" of more than 100 additional patents.

"It uses that patent thicket to keep any other biosimilar... off the market," Carrier said. "When there are so many patents on any particular drug, it's easy to find some where you can claim infringement."

Carrier says another tactic is "product hopping," where a company will make minor changes to their drug, like switching from a capsule to a tablet or changing the dosage.

"Every time there's a change like this, the generic has to go back to the drawing board. Has to redesign the product, get FDA approval. It can't be substituted at the pharmacy counter because it's a little bit different. And so that's what product hopping is all about," Carrier said.

And Pam Holt's drug Revlimid? It's in a special group of high-risk drugs. To make a generic version, a competitor has to be able to get samples from original manufacturer Celgene. But generics manufacturer Mylan is suing Celgene, saying it won't provide the samples, and so it "has directly blocked patient access to generic Revlimid and prevented savings for patients."

"And I'm just learning that now. So that is just devastating to me that they could take advantage of sick people who need these drugs," Holt said. "Because, you know, sick people should not have to increase the profits of these huge drug corporations. At some point, there needs to be understanding that people should be able to have the drugs that they need to survive."

Celgene did not comment about Mylan's lawsuit but in court filings called it pointless. The company also sent us a brochure saying it's willing to make Revlimid and other drugs available to generic manufacturers and that it "consistently offers and has sold samples" for what's called bioequivalence testing.

So what do other drug companies have to say? Lori Reilly, the executive vice president of policy, research and membership with the industry's lobbying group PhRMA, said the system is working.

"Ninety percent of all medicines are generic. Over 1,000 new ones approved just last year, the highest of anywhere in the world. And over a $100 billion worth of new medicines going off patent in the next five years. I think our system, by and large, has worked tremendously well," Reilly said. "I'm basically saying that if to the extent there are issues, that there are multiple opportunities and venues to address those."

She says companies invest billions to bring new medicines to market and need patents to protect those investments and to innovate.

Lori Reilly: Our companies enter into, with great intent, of trying to make their medicines more productive, more useful for patients and society.
Reporter: Always with these strategies?
Lori Reilly: I believe so, yes.
Reporter: Without exception?
Lori Reilly: Well, I certainly don't look at every single patent a company gets, but I believe our companies act with very good intent, yes.

But Holt says she's decided to act, too, by joining the group Patients for Affordable Drugs. She's using the time she has left to fight drug companies.

"It's just-- so very irritating and so very heartbreaking that there's so little being done to help us," Holt said.

Celgene says a generic version of Revlimid comes out in 2022. Holt may not live that long. Her doctors say at best, she may have 10 years left. The company does offer a reduced-payment program, but as a retired educator, Holt makes too much to qualify though not enough to avoid going more than $7,000 into debt.

AbbVie did not comment on Humira.