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
    Benjie, 7 Dec 2009 @ 10:19am


    "What is funny to me is that the technique used is very similar to people infringing on copyright every day. Basically, they make it outrageously expensive for the copyright holders to take them to court, to win a judgement that can never be satisfied. So the copyright holders are suppose to "embrace sharing" rather than be able to use their rights."

    All patents and copyrights are for the benefit of the people. As soon as a patent or copyright ceases to benefit the general public it no longer is serving its purpose and should be revoked.

    Many studies have shown that the more likely someone is to pirate a copyrighted material, the more likely the are to purchase that item. Another recent study has shown the current model of copyright works BEST when 30% of people create ad 70% of people copy

    Either way, copying will ALWAYS be around and society works best when there is at least some copying, not sure about 70% though.

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