Washington, D.C. –Today, House Judiciary Committee Chairman Jerrold Nadler (D-NY) delivered the following opening remarks during the markup of H.R. 5133, the Affordable Prescriptions for Patients Through Promoting Competition Act of 2019:
"H.R. 5133, the 'Affordable Prescriptions for Patients Through Promoting Competition Act of 2019,' is one of two bipartisan measures that we are considering today as part of the Committee’s efforts to lower the soaring cost of prescription drugs and deliver more affordable healthcare for consumers.
"This legislation addresses a practice known as 'product hopping,' which occurs when a company makes a nominal change to a product that is facing the end of patent exclusivity—such as a change to its dosage or delivery mechanism. The company then either removes the old product from the market or makes the old product seem much less attractive than the new product. Doctors and patients, therefore, have essentially no choice but to switch to the new—but not improved—drug, for which the drug company can continue to charge monopoly prices. This conduct focuses on the delivery of profits to big pharma rather than meaningful innovation for sick patients.
"For example, in a recent case, a drug manufacturer with a life-saving medication for opioid addiction, changed the form of the treatment from tablets to a film—even though it was more expensive to manufacture, and was no more safe or effective—just so it could continue its stranglehold on the market.
"As Chairman Joseph Simons of the Federal Trade Commission testified earlier this month before the Antitrust Subcommittee, this anti-competitive scheme shifted 'existing patients away from the product about to face generic competition and onto another, more lucrative product that enjoyed patent protection and provided no legitimate incremental benefits.'
"Unfortunately, courts have struggled to consistently apply the antitrust laws to this conduct. Moreover, antitrust litigation to address anti-competitive behavior in pharmaceutical markets is costly and slow, often taking years—if not decades—to stop the abusive behavior.
"To address these concerns, H.R. 5133 would prohibit product hopping by establishing that it is an unfair method of competition in violation of the Federal Trade Commission Act. In doing so, not only would this legislation help deter such conduct in the first place—through the FTC’s ability to obtain equitable monetary relief—it would also expedite judicial proceedings by providing much needed clarity to the law.
"This bill is companion legislation to part of S. 1426, the Affordable Prescription for Patients Act, which was favorably reported by the Senate Judiciary Committee by a unanimous vote in June. According to the non-partisan Congressional Budget Office, this legislation will save American taxpayers more than half-a-billion dollars over a ten-year period.
"This legislation builds on the Committee’s strong record of bipartisan legislation to lower the price of prescription drugs for patients. Earlier this year, the Committee unanimously reported a series of bills to confront one of the leading drivers of high prescription drug costs—competition-blocking efforts by branded drug companies to keep generic drugs off the market so that they can preserve their monopoly profits.
"This outrageous behavior—which puts profits before patients— thwarts the competition that is essential to lowering prescription drug prices. According to a study by the Federal Trade Commission, having a single generic competitor in the market can lower the price of a branded drug product by as much as 20% to 30% off the branded product’s price, while the entry of additional competitors can lower the price by 85% or more.
"H.R. 5133 would address similarly anti-competitive conduct by drug makers to help reduce the cost of prescription drugs for consumers. I thank the sponsor of this legislation, Mr. Cicilline, the Chairman of the Subcommittee on Antitrust, Commercial, and Administrative Law, as well as Ranking Member Collins and Subcommittee Ranking Member Sensenbrenner for their leadership on this bipartisan measure, and I urge my colleagues to support this legislation."