23 September 2014


The FTC is suing brand name drug makers over their payments to generic drug manufacturers to delay their production:
For the first time since the U.S. Supreme Court ruled last year that so-called pay-to-delay deals may be subject to greater antitrust scrutiny, the U.S. Federal Trade Commission has filed a lawsuit charging drug makers with violating anti-trust laws and hurting consumers in their collective pocketbooks.

Specifically, the agency charged several drug makers – including AbbVie ; Abbott Laboratories , which spun off AbbVie, and Teva Pharmaceuticals – for striking deals that delayed the availability of the widely promoted AndroGel testosterone replacement therapy, a $1 billion seller.

“We believe the defendants’ anticompetitive conduct has forced consumers to overpay hundreds of millions of dollars for this medication,” FTC chairwoman Edith Ramirez told the media in a briefing, in which she noted the agency hopes to force the drug makers to disgorge “their ill-gotten gains.”

In these deals, a brand-name drug maker settles with a generic rival in exchange for ending patent litigation and launching a copycat medicine at a future date. The pharmaceutical industry contends the deals are not only legal, but actually allow drugs to reach consumers faster than if litigation continued.

Also known as reverse payment settlements, the deals emerged as an unintended consequence of the Hatch-Waxman Act that was designed to accelerate access to lower-cost generics. An FTC report in 2012 found there 40 potential pay-to-deals, up from 28 the year before.

The Supreme Court ruling, which reviewed a lawsuit brought by the FTC against Actavis, was a boost to the agency, because it supported the contention that pay-to-delay deals may violate antitrust laws and, effectively, allowed the FTC to pursue lawsuits against drug makers.


In its lawsuit, the FTC charges that AbbVie, Abbott and Bevins Healthcare filed “sham” patent litigation against potential generic rivals, including Teva, and then entered into an allegedly illegal patent settlement in order to thwart competition.
I've said it before (like the post just before this one):  Our current model of capitalism is a harmful and corrupt system that resembles nothing more than the book Lord of the Flies.


Unknown said...

Suits like this are terrific, but at the end of the day they'll probably wind up in judgments that sound huge (hundreds of millions of dollars) but are just decimal dust, cost of doing business, for the manufacturers. And the cost of bringing each suit is enormous, so there won't be as many suits as are deserved. Without criminal penalties (jail time) for the CEOs of the manufacturers, we'll still fail at fundamental change. They are experts at dodging the moguls.

The more elegant answer, of course, is to improve Medicare, provide that to all Americans, and require the new "Medicare for All" agency to negotiate the prices of all drugs with manufacturers. Virtually all other modern nations address the problem in this way, at roughly half our overall cost and longer life expectancies.

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