Senate Committee Details Methods Used to Inflate Off-Patent Drug Prices

Four pharmaceutical companies that dramatically raised prices for decades-old, off-patent drugs all followed a series of steps designed to create and defend a monopoly on the product — allowing them to control the product’s prices with little, if any, market interference, according to a Senate committee investigation.

The business model focused on identifying a sole-source drug; one considered to be a standard of care for a disease with a small market — something that doctors would continue to prescribe to a patient population too small to organize public opposition. The company would then control access to the drug to limit its use by other companies trying to develop alternatives, sometimes through FDA risk evaluation and mitigation strategies.

Finally, the company would be able to gouge prices on the newly acquired intellectual property, according to a report from the leaders of the Senate Special Committee on Aging.