One Reason New Yorkers Pay So Much for Medications

In the complex world of prescription drug pricing, there’s a little-known reason why that expensive medication you need hits you hard in the pocketbook.

Name-brand drug companies frequently enter into agreements with producers of generic versions to delay the introduction of the less expensive form.

The so-called pay-for-delay practice has long drawn criticism from the federal government and patient advocates, who say such deals hurt consumers, who may skip meds to save money.

The savings can be considerable with a generic. The common medication Singulair, for asthma and allergies, is priced at about $245 for 30 pills, but it can be $10 for the generic, montelukast.

A bill AARP is supporting in the state legislature would put an end to these deals, to preserve access to affordable generic drugs.

“Essentially, what the bill does is ban that relationship. It bans any kind of back-and-forth between two companies,” said Bill Ferris, AARP New York’s state legislative representative. “New Yorkers should have access to the lowest-cost prescription drugs. Generic drugs should be brought to market without delay.”

The legislation is modeled after a 2020 California law that puts the onus on brand-name drug companies to prove that their pay-for-delay agreements impeding generic alternatives aren’t illegal.

According to the New York bill, “Rising prescription drug prices have been devastating to New Yorkers who depend on prescription drugs to keep them healthy.”

The price of waiting

A company developing a brand-name drug can get a patent and a period of exclusive marketing for the product. A pay-for-delay agreement with a generic producer, which agrees not to compete, extends that period.

The Federal Trade Commission (FTC) calls the issue one of its top priorities, noting that agreements with payment from the brand-name company can delay generics for nearly 17 months longer than those without such compensation.

These deals cost consumers and taxpayers $3.5 billion in higher drug costs each year, according to an FTC study. Since 2001, it has filed a number of lawsuits to stop such agreements and supports legislation to end them.

Closing loopholes like pay-for-delay is part of AARP’s Stop Rx Greed campaign to lower drug costs, along with capping out-of-pocket expenses, stopping price gouging, supporting transparency and importing the same drugs at cheaper prices.

A 2019 AARP New York survey found that 24 percent of state voters 50-plus skipped taking medications, mainly due to cost.

State Sen. Alessandra Biaggi (D-Pelham), the sponsor of the state bill, said affordability is a main concern for her constituents. Many of them have multiple conditions, like asthma, diabetes and cancer.

“Almost everybody that I have spoken to about health care, one of the first things brought up is prescription drug prices. They feel like they’re being cheated and honestly, I don’t blame them. I feel the same way,” Biaggi said.

“Let’s say you can’t afford that high-priced name-brand drug and you have to wait. What happens to your health while waiting for this drug to be released in generic? This is not right,” she said.

You can urge your state legislators to pass this bill by calling 844-617-2691 (Senate) and 844-656-6822 (Assembly).

Donna Liquori is a writer living in Albany.

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