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I posted this in an earlier thread:
Big pharma makes more paying to keep generics off the market
News of the practice has circled for some time, but now it is hitting the mainstream. Apparently pharmaceutical companies have figured out that they can make more money by paying the makers of generic drugs to withold their products. The pharmaceutical companies are paying the generic companies more than they are estimated to make with the generics, which ends up being less than the money that the patent-holders are estimated to lose if the generics hit the market.
Good for both companies. Bad for consumers.
http://www.ftc.gov/opa/2007/01/leibowitztestimony.htm
To illustrate this problem, the testimony cited an FTC study released today containing the staffs analysis of a disturbing new trend in drug settlements filed during the fiscal year ending in September 2006. According to the study the third annual report the FTC has issued on this subject half of all patent settlements in FY 2006 (14 of 28) involved compensation to the generic patent challenger and an agreement by the generic firm to refrain from launching its product for some time.
http://www.law.com/jsp/article.jsp?id=1169114544083
http://leahy.senate.gov/press/200211/111902.html
Senate Passes Leahy Bill
Targeting Sweetheart Deals
That Delay Low-Cost Generic Drugs
WASHINGTON (Nov. 19) A bill authored by Sen. Patrick Leahy aimed at eliminating the secret deals between big pharmaceutical firms and generic drug makers that keep affordable prescription drugs off the market passed the Senate Monday night.
Leahys Drug Competition Act (S. 754) requires brand-name and generic companies to report their deals to the Federal Trade Commission (FTC) and the Justice Departments Antitrust Division so that these antitrust enforcement agencies can promptly investigate any aspects of the deals that raise competitive concerns.
Consumers pay the price when drug makers collude to stifle competition and drive up the cost of prescription drugs, said Leahy, who chairs the Senate Judiciary Committee, which oversees the Justice Department and its antitrust division. Our bill discourages these sweetheart deals by ensuring that antitrust authorities can take quick and decisive action against these companies.
Big pharmaceutical firms have become major players in the legislative process, and the bill has been held hostage by anonymous Republican holds for more than a year after it was unanimously approved by the Judiciary Committee.