Pay-For-Delay Agreements Again Show How Pharma Abuses Patent Law To Harm Us All

from the this-helps-who-exactly? dept

We've discussed in the past how pharmaceutical patents actually tend to slow down the development of better healthcare solutions, and earlier this year, we mentioned how the EU was growing increasingly concerned about how patent holders were abusing their patents to try to prevent generic competitors from entering the market. Recently, US FTC officials have noticed the same thing and are trying to do something about it -- but are facing tremendous (well organized and well financed) pushback from pharmaceutical lobbyists (the kind who are able to get more than 40 Congressional reps, on both sides of the aisle, to repeat talking points into the Congressional record with no shame).

At issue is the fact that the big pharma firms are paying off generic drug makers to keep them from entering the market -- which in any other market would be a clear anti-competitive activity. How do patents fit into the equation? Well, the big pharma companies are suing the generics for patent infringement, but know they don't have any legal leg to stand on. The filing of the lawsuit is basically just a negotiating ploy, bringing the generic manufacturer to the table. If there were actual infringement, then the generic maker could be barred or would have to pay up. Instead, the money flows the other way. The two parties settle in a "pay for delay" pact, whereby the patent holder pays off the generic maker to stay out of the market, even if there's no real infringement. This basically grants the patent holder extra monopoly time on a drug, which can be worth billions, but makes drugs significantly more expensive for everyone.

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  1. identicon
    Anonymous Coward, 7 Dec 2009 @ 7:13am

    You think the generic companies fear the pharma companies? Guess what, they don't. One Canadian generic totally hosed BMS and their dummy CEO by agreeing to a pay for delay, and then found a loophole and started selling the drug right away.

    Generic company executives are not stupid and even selling generics, have quite a bit of money.

    Who is in the drivers seat, Pfizer or the company that has exclusive rights to Lipitor soon? Guess what, it ain't Pfizer.

    Want to save money on drugs? Get rid of the 6 month monopoly that the generic company has on selling a recent drug that goes off patent. When Prozac went off patent, the company that had that monopoly sold Prozac for exactly $2 less a perscription than Lilly did. Lilly's sales dropped 90% within those 6 months all for a grand savings of $2 bucks.

    Of course, without that monopoly, there would be very few generic companies around, but hey, if it works for patents.....

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