Brand-name drugmakers are increasingly making generic versions of their own drugs, a strategy that keeps drug costs high and stifles competition, critics of the practice told Kaiser Health News.
The tactic is common among brand-name pharmaceutical companies aiming to maximize profits on their soon-to-be off patent drugs.
Last year, the launch of authorized generics was announced at a rate of about once a week, according to the report. Mylan introduced an authorized generic version of EpiPen, and Eli Lilly announced plans to launch a less expensive version of its brand-name insulin, Humalog.
More than 1,200 authorized generics have been approved in the U.S.
While the authorized generics are launched at cheaper prices than brand-name drugs, they can be just as profitable, if not more profitable, than brandname drugs, according to Kaiser Health News. Research firm Cutting Edge Information calculated in 2015 that authorized generics return about $50 for every dollar invested.
Critics argue that authorized generics hurt long-term competition and increase costs by stealing sales from existing generic rivals and erode incentives for competitors to make generic drugs.
"Authorized generics are not generic drugs," Sumit Dutta, MD, CMO for drug-benefit manager OptumRx, told Congress in April. "The marketing and production of authorized generics is exclusively controlled and directed by brand-drug manufacturers. They do nothing to promote competition."
Despite the criticism, brand-name drugmakers say authorized generics increase competition and reduce prices.
Read the full report here.