Antitrust Suit Alleges Pharma Company Rubbished Its Own Product In Order To Stave Off Competition From Generics

from the commercial-motives-played-no-part dept

Techdirt has written a number of stories about how Big Pharma is never content with the patent bargain — that, in return for a time-limited, government-enforced intellectual monopoly, products will afterwards enter the public domain. Instead, companies have come up with various schemes to extend the life of that monopoly — and thus to cheat the public of the low-cost generic versions of the drug in question that should have appeared. The Daily Beast points to an antitrust lawsuit brought by 35 states and the District of Columbia against the makers of Suboxone, a prescription drug used to treat opioid addiction, over the alleged use of one such scheme, known as “product hopping”. That’s where:

a company makes modest changes to a product to extend its patent protections so that other companies cannot enter the market and offer less-expensive generic alternatives.

In this particular example:

Reckitt Benckiser Pharmaceuticals, Inc. — now known as Indivior PLC — and MonoSol Rx are accused of conspiring to switch Suboxone from a tablet version to a film, which dissolves in the mouth, in order to prevent or delay generic alternatives and maintain artificially inflated profits.

Over time, the states allege that Reckitt converted the market away from the tablet to the film through marketing, price adjustments and other methods. Ultimately, after the majority of Suboxone prescriptions were written for the film, Reckitt removed the tablet from the U.S. market.

The “other methods” are particularly interesting. In September 2012, Reckitt announced that it was going to “voluntarily discontinue the supply of Suboxone tablets“, because it was worried they might be dangerous for children:

The company received an analysis of data from U.S. Poison Control Centers on September 15, 2012 that found consistently and significantly higher rates of accidental unsupervised pediatric exposure with Suboxone Tablets … than seen with Suboxone Film … The rates for Suboxone Tablets were 7.8-8.5 times greater depending on the study period.

Curiously, though, Reckitt didn’t mention that the study had been commissioned by itself, as the Guardian noted in an article at the time. Quite why Reckitt would want to pay for and then publicize a study that showed one of its own products was dangerous became clearer just a few hours later, when it submitted a “citizen petition” to the Food and Drug Administration:

urging the US regulator to ban any future competitor pills to its suboxone tablets that were insufficiently “child resistant”.

In other words, Reckitt effectively wanted the FDA to ban any generic versions of its own tablets, now out of patent, while leaving its patented film formulation on the market to enjoy a new monopoly. As the Guardian reported:

A company spokesman has insisted commercial motives played no part in Reckitt’s decision to withdraw suboxone tablets from the market. However, Martin Deboo, an analyst at Investec Securites said: “We view these moves as consistent with Reckitt’s strategy of protecting the suboxone franchise by hastening migration to [strip] and raising barriers to entry to generics.”

The new antitrust lawsuit will doubtless explore these moves in detail, and the harm they might have caused, both financial and in terms of patient suffering. The plaintiffs allege:

that federal and state healthcare programs, including Medicaid, as well as consumers and other purchasers have paid artificially high monopoly prices since late 2009, when generic alternatives of Suboxone might otherwise have become available. During that time, annual sales of Suboxone topped $1 billion and, since then, rates of opioid abuse in Connecticut and across the country have increased significantly.

That’s a useful reminder that pharma patents are not just about monopolies and money, but also about people and pain.

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Companies: indivior, monosol, reckitt benckiser

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Comments on “Antitrust Suit Alleges Pharma Company Rubbished Its Own Product In Order To Stave Off Competition From Generics”

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27 Comments
That One Guy (profile) says:

Anyone else smell cow?

A company spokesman has insisted commercial motives played no part in Reckitt’s decision to withdraw suboxone tablets from the market.

Besides containing more bullshit than a country-sized cattle ranch, it seems this also creates the perfect way for them to back up their claims that it’s not about the money. If the concern is really about ‘safety’ then they should allow generics of the ‘new’ version to be created, since it’s just a ‘new’, more ‘safer’ version of the ‘old’ drug, which is no longer locked up by patents. Allow the public access to the ‘safer’ version of the drug at generic prices, so that more people can benefit from it.

Of course given that no-one with so much as two neurons to knock together and no financial stake in the matter believes their claim that this isn’t about money I don’t expect them to do so in the slightest, but I’d be perfectly happy to be proven wrong here.

Mason Wheeler says:

Re: Re:

Oh, these guys aren’t even the worst of it, even in the opioid addiction realm.

Suboxone is one way to treat opioid addiction, but a more common treatment is Methadone. The primary producer and vendor of Methadone is Mallinckrodt Pharmaceuticals. Among Mallinckrodt’s portfolio is a handful of opioid pain pills, including Roxicodone™, made from the same active ingredient as the notoriously addictive OxyContin.

In other words, they’re actively profiting off both sides of the addiction equation.

Anonymous Coward says:

“Instead, companies have come up with various schemes to extend the life of that monopoly “

Well, of course they do. This is laissez faire capitalism, let them lie, cheat, steal … all business strives for a monopoly position because then they are in charge. Charge what the market will bear, and then charge more … why? – because you can. Then get the government (taxpayer) hooked on your product and you’re on easy street. The other side of the same coin is not very pretty either. Walking a tight rope requires balance and stamina, sorta like government regulation of industry. Like children, they need supervision and constant support – the absence of which leads to tyranny.

Anonymous Coward says:

Re: Re: Re: Re:

And patents were a response to trade secrets …. and on and on and on.

It seems to me that if the true purpose of patents was to eliminate trade secrets then trade secrets would have been outlawed. They weren’t. No, patents were created to protect what couldn’t be easily protected by trade secrets, not to replace them.

Anonymous Coward says:

Re: Re:

‘”Instead, companies have come up with various schemes to extend the life of that monopoly”‘

‘This is laissez faire capitalism, … all business strives for a monopoly position’

Bzzzzt! Wrong!

‘monopoly’ (especially a government-sponsored monopoly like a patent) is not ‘laissez faire capitalism’

Nothing about the U.S. health care market is ‘laissez faire capitalism’

There are lots of problems with pharma, but ‘laissez faire capitalism’ isn’t one of them.

Wendy Cockcroft (user link) says:

Re: Re: Re:

Take a good look at the history of laissez-faire capitalism and repeat that for me, will you, please?

Thanks in advance. Just click this link:

http://lmgtfy.com/?q=laissez-faire&l=1#seen

Have you noticed that the laissez-faire brigade have historically always been up to their eyeballs in “government?” In this case, they WERE the government, which is why all those people either starved to death or relocated.

Conclusion: this whole “get the government out of the way” thing has only ever been about letting corporate actors do whatever they want, no matter who gets hurt. As an Irishwoman, the term laissez-faire will always be commingled with the word “famine.” When the best the enthusiasts can come up with when I mention this is, “The market corrected itself,” I know I’m right.

Quiet Lurcker says:

The “study” (paid for by the manufacturer, therefore automatically suspect) suggested the film was safer, on grounds that fewer children were getting their hands on the film version of the med.

I have to wonder. Did they account for how widely used (or sold, or perhaps prescribed – not sure what the correct metric here would be) the film was in comparison to the pill? My thinking is, if there were as many doses of the film handed out (sold or prescribed – again, choose what term you will), then of course children won’t be getting their hands on it as often as the pill.

I have to wonder then. Did they use the timing of their “study” (perhaps instead of or in addition to any shady statistical/technical finagltry) in relation to the release of the drug to affect the outcome?

Anonymous Coward says:

Re: Laissez-faire?

In a free market there would be no legal way to block competition.

Some say that in a “truly free” market government power is for sale to the highest bidder. Of course, some also say that a “truly free” society is one in which people are free to own slaves as well. I disagree, but it all depends on how you define “free”.

Anonymous Coward says:

Business/Politics as usual in the good old US of A. Just take a hard look at the two felonious dirt bags we have running for our nations highest office. Wish I could name a single decent thing either has done to make this world a better place. I can only imagine what event will push it all over the edge. Also take note that the 1% are busy building their “shelters”. Guess they realize you can’t take it with you after all.

Anonymous Coward says:

Laissez-faire?

Exactly, the government granted monopoly is the problem here.

Eliminate the monopoly and competitors will move in to sell a competing product for a lower price.

If we are going to grant monopolies they should come with a limit on profit margins. Allowing a company to make a 300% profit seems like a good trade for exclusivity.

The medicine I take cost $13,000 a month, about 10 years ago it cost around $2200/mo, every few months the price goes up. Even Satan wouldn’t be that greedy.

Anonymous Coward says:

So… does this make it illegal to produce a generic pill version?
Aaaah… I forgot that in the US you’ve got to Keep Up With The Joneses.

Going from a pill to a film creates a new patent for the film version. The “old” pill version’s patent will still expire on the same date.
Generics manufacturers can still make the pill version and if customers choose to pay through the nose for the brand version, they’re the dumb ones.

At least buprenorphine was actually “invented” by Rickett.

A far bigger problem is allowing big pharma to buy rights to old medicine (that they didn’t even “invent” themselves) from universities and end up the exclusive distributors of (see Turing, Mylan, Valent, Novum Pharma, AMAG et. al.).

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