In full transparency, the following is a media release from Sen. Elizabeth Warren’s office. She was elected by voters in the Commonwealth of Massachusetts to serve the state in Washington DC in the US Senate. She is a Democrat. (stock photo)
WASHINGTON DC – U.S. Senator Elizabeth Warren (D-Mass.) sent a letter to Federal Trade Commission (FTC) Chair Lina Khan and FTC Commissioners Alvardo Bedoya and Rebecca Kelly Slaughter urging the agency to closely scrutinize two pending big pharmaceutical mergers: Amgen and Horizon Therapeutics, and Indivior and Opiant. In the letter, the Senator expresses concern over the rampant consolidation in the pharmaceutical industry and its impact on drug affordability and access in the United States. She also highlights the companies’ long history of corporate price gouging and monopolistic behavior.
“Given these companies’ records of anti-competitive business practices, these acquisitions could cause further price increases on lifesaving drugs and prevent affordable alternatives from entering the market. The FTC should carefully scrutinize these deals and oppose any Big Pharma acquisition that will threaten competition, reduce innovation, or increase costs for American families,” wrote Senator Warren.
In recent decades, there has been extensive consolidation in the pharmaceutical industry, with the 60 most dominant pharmaceutical companies consolidating to a mere 10 firms between 1995 and 2015, leading to higher prices for American patients and decreased innovation. These corporate deals are bad for patients: prices for drugs sold by acquired companies increase at a faster rate than those sold by their non-acquired counterparts.
“The Inflation Reduction Act will make a profound difference for millions of Americans struggling with high drug costs. But beyond the passage of this law, there are additional actions that the administration can take to reduce the cost of prescription drugs and ensure competition in the pharmaceutical market. In particular, robust FTC enforcement of antitrust law can help slow the pace of drug company consolidation,” wrote Senator Warren.
Amgen’s $28.7 billion proposed acquisition of Horizon Therapeutics would be among the largest health care deals of recent years. This acquisition presents numerous antitrust and price gouging concerns. Both Amgen and Horizon have engaged in brazen price increases on drugs that face little or no competition, while Amgen has abused the patent process, creating patent thickets to “evergreen” their products, prevent generic competition, and maintain market dominance. Amgen’s most egregious price hikes have involved its most profitable drug, Enbrel.
After acquiring Enbrel’s rights in 2002, Amgen has enacted 27 price hikes on the drug, raising its initial price of $996 per month in 2002 to $5,556 per month in 2020 – a 457% increase. Amgen’s price hikes reveal a concerted effort by executives to pad their profits at the expense of American patients. Internal documents released by the U.S. House Committee on Oversight and Reform revealed that the drug’s frequent price increases were “driven primarily by the need to meet increasingly aggressive revenue targets.
Horizon Therapautics also has a history of price gouging. A 2021 report published by the ICER highlighted ten drugs with the highest net price increases over the previous 12-month period, including. Horizon’s Krystexxa, a gout medication that topped the list of drugs whose price increases were unsupported by new clinical evidence. Krystexxa’s nearly 12% annual price increase, will cause Medicare patients to pay up to $3,210 more per year for the drug on average. Similarly, since acquiring the rights of Vimovo – a prescription painkiller that combines Aleve and Nexium, both of which can be purchased over the counter for under $40 – the price of a 60-pill bottle increased from $138 in 2014 to nearly $3,000 in 2018.
Indivior’s proposed acquisition of Opiant – the original owner of the opioid reversal treatment Narcan – comes at the height of the opioid epidemic. Indivior and its former parent company, Reckitt Benckiser Group, have also been mired in legal trouble over monopolistic behavior towards their opioid addiction treatment, Suboxone. Introduced in 2002, Suboxone, initially taken in pill form, was set to lose its patent protection in 2009. However, in an attempt to shield the drug from generic competition and keep prices high, Indivior developed a dissolvable film version of the drug, which it then deceptively marketed as safer than the tablet form in an attempt to shift prescriptions to the newly patented protected drug.
Ultimately, FTC settled with both Indivior and Reckitt Benckiser Group for a total of $60 million after the agency found that the companies “illegally maintained a monopoly over the opioid addiction treatment Suboxone.” In separate cases with the Department of Justice (DOJ), Indivior and Reckitt Benckiser were found guilty of falsely marketing Suboxone’s film version as a safer treatment alternative to the tablet version, as well as using a telephone and internet program where doctors prescribed Suboxone in quantities that violated federal regulations. All in all, the resolution required the two companies to pay roughly $2 billion in fines – the largest ever opioid-related resolution the DOJ has ever brought forward.
The Senator also requested information from the Commissioners regarding the way the FTC reviews Big Pharma mergers.