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
    DB, 7 Dec 2009 @ 7:20pm

    Illegal As Defined, Not If Good Faith & Reasonable

    An awfully large number of the comments have conclusions built in. If we are given it is a frivolous lawsuit, then yes, it's illegal. But if there is a good faith claim for patent infringement, then it's illegal if it is unreasonable.
    So, if we take the initial comment as presuming frivolity, then there's no analytical problem, is there? It's illegal. So the DOJ and FTC and competitors have a case.
    See In re Cardizem CD Antitrust Litigation (Louisiana Wholesale Drug Co. v. Hoechst Marion Roussel, Inc., and Andrx Pharmaceuticals, Inc.) 332 F.3d 896 (6th Cir 2003) Schering-Plough Corp. v. F.T.C. 402 F.3d 1056 (11th Cir 2005) In re Ciprofloxacin Hydrochloride Antitrust Litigation, 544 F.3d 1323 (C.A. Fed., Oct. 15, 2008) In re Tamoxifen Citrate Antitrust Litigation, 429 F.3d 370, 77 USPQ2d 1705 (2d Cir. 2005)

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