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Drug Distribution Becomes Weapon to Block Competition
Key Excerpts from Article on Website of ABC/Associated Press
Posted: March 7th, 2016
http://abcnews.go.com/Business/wireStory/drug-distribution-w...
The same strategy that Martin Shkreli used to get away with a 5,000-percent price increase on an old drug is used by many other drugmakers. Before the price hike that made him infamous, the former CEO of Turing Pharmaceuticals had to ensure that no competitor would be able to launch a cheaper version of Daraprim, the 60-year-old anti-infection pill that is no longer under patent. Shkreli had the perfect weapon: a tightly-controlled distribution system which would make it virtually impossible for a competitor to obtain enough Daraprim to develop their own version. Many larger drugmakers have also turned drug distribution into a powerful tool against competition. The strategy takes advantage of a simple fact: If generic drugmakers can't get their hands on the original product, they cannot perform the tests needed to develop a generic version. When the original drugmaker controls the drug's distribution, they can simply refuse to sell. The effect on patients is higher prices for drugs. At least 40 drugs worth an estimated $5.4 billion are sheltered from competition by distribution hurdles, according to a study commissioned by the Generic Pharmaceutical Association, an industry trade group. The Food and Drug Administration is aware of the misuse of distribution programs. The agency does not penalize companies for the practice.
Note: For more excellent information on drug prices hikes, read this penetrating article in the Daily Beast. For more along these lines, see concise summaries of deeply revealing big Pharma profiteering news articles from reliable major media sources.
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