Drug-Makers Paying Off Competitors To Keep Cheap Generics Off Market

[babylonsister]

Drug-Makers Paying Off Competitors To Keep Cheap Generics Off Market
Zachary Roth | December 2, 2009, 3:07PM


Republicans and their allies in the business community talk a good game about the virtues of free-market competition. But, as we've seen in the debate over the public option, that stance often goes out the window when corporate profits are at stake.

And now we've got another example -- one of the sleaziest and most blatantly self-serving yet.

Over the last few years, drug-makers have embraced a startlingly simple tactic for fending off competition from generic brands: paying them off. In a nutshell, the company that holds the patent on a profitable drug strikes a deal with the maker of the cheaper generic brand: you hold off on marketing your generic for several years, and in return, we'll give you a share of our profits on the drug.

So common have these deals become lately that they've been given a name: pay-for-delay. The approach -- a textbook anti-competitive tactic -- is worth billions to drug-makers, because it essentially allows them to buy more protection than their patent confers.

That was made more or less explicit by Frank Balsino, the CEO of Cephalon, which makes the sleep-disorder drug Provigil. In a 2006 interview, Baldino trumpeted recent deals with four generic drug-makers that kept generic versions of Provigil off the market until 2012, declaring: "We were able to get six more years of patent protection. That's $4 billion in sales that no one expected."

But pay-for-delay doesn't work out nearly so well for consumers. Generics are sometimes priced as much as 80 or 90 percent cheaper than the name brands. For instance, the cholesterol drug Zocor costs $164 a month, while a generic version costs just $12 a month. Pay-for-delay deals will cost consumers an extra $35 billion over the next decade, by keeping those cheaper generics off the market, according to a recent Federal Trade Commission study. And it's the uninsured, who pay out-of-pocket for drugs, that disproportionately pay those costs.

Part of the blame lies with the Bush administration. A series of court rulings in 2004 made pay-for-delay much more common, with the result that in 2006 and 2007, nearly half of all deals between generic brand-name drug-makers involved a payment to the generic maker in exchange for a promise to stay out of the marketplace, according to the FTC study. On several occasions, the Bush Justice Department declined to weigh in on the side of consumers by urging the Supreme Court to clarify the law, as it could easily have done.

more...

http://tpmmuckraker.talkingpointsmemo.com/2009/12/drug-makers_paying_off_competitors_to_keep_cheap_g.php?ref=fpblg

[NC_Nurse]

1. That just makes me want to SCREAM.

:mad:

[babylonsister]

7. I hear you. Disgusting. There oughta be a law. nt

[phantom power]

2. Republicans confuse "free" with "fair" or "healthy"

Or, maybe they just don't care as much about "fair" and "healthy" as they do about making sure there are no rules.

[Echo In Light]

3. One can always count upon the evil of corporate America

[azul]

4. It's a racket.

The other part of the picture is that the big drug companies have been buying up generic companies in the last few years especially.

It is my suspicion, from seeing a more and more limited number of generics of many drugs available from wholesalers, and from inadequately explained shortages of generic drugs, that the majors are in cahoots to divvy up the generic market to keep prices and profits up.

[NightWatcher]

5. that's "free" market. Free to bribe, free to cheat, free to pollute....

Now "fair" is something completely different.

They preach fair market, they've got it

[flamin lib]

6. k&r