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July 20, 2020

Product Hopping—An Expensive and Wasteful Practice

Author Affiliations
  • 1Department of Internal Medicine, University of California, San Francisco, San Francisco
  • 2Editorial Fellow, JAMA Internal Medicine
  • 3Division of Cardiology, Department of Internal Medicine, University of California, San Francisco, San Francisco
  • 4Editor, JAMA Internal Medicine
JAMA Intern Med. Published online July 20, 2020. doi:10.1001/jamainternmed.2020.2736

What is the price of patient convenience or the cost of providing incentives for its delay? In this issue, Rome et al1 report on the $4.3 billion to $6.5 billion of excess drug spending by patients, Medicare, Medicaid, and private insurers because the manufacturer of glatiramer acetate, a disease-modifying drug for multiple sclerosis that patients must take indefinitely, waited until 1 year before the expiration of the patent of their original product to reformulate it, effectively delaying full generic competition. In 2014, Teva Pharmaceuticals obtained a new patent for a double-strength, 3-times-weekly injection of glatiramer acetate (Copaxone), 40 mg, to replace daily glatiramer, 20 mg. This new formulation, which has the advantage of fewer injection reactions and greater patient convenience compared with the daily version, was first registered in a clinical trial in 2005 but was released 10 years later. There were aggressive advertisements for this new formulation, reduced rebates for the old brand name product, and a price point similar to that of the generic daily version that could enter the market when the patent expired for Copaxone in 2015. The combination of these factors allowed Teva to increase its earnings for another 2.5 years by delaying market competition that could have driven down the prices of both generic and brand name glatiramer.

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