How Much Longer Will Patients Be Ripped Off by Pay-for-Delay

(December 6, 2011) This is not the first time we are writing about this topic but it seems it just keeps getting worse and worse instead of better, according to the Federal Trade Commission.

 

Large pharmaceutical companies are deliberately delaying the generic competition to hold it’s competing product from the market for a certain period of time.  This is called “pay-for-delay” and these agreements have come to be as part of patent litigation settlement agreements between the brand name and generic pharmaceutical companies.

 

The “pay-for-delay” agreements are a total “win-win” situation for the companies:  brand-name pharmaceutical prices remain high and the brand and generic get to share the benefits of the brand’s monopoly profits.

 

Who is losing out from all of this?  The consumers.  The American people who work hard for their money in these difficult economic times, those on fixed incomes, elderly patients who sometimes have to go without medication due to the astronomical prices of these drugs.  They miss out on generic prices, which can be as much as 90% less than brand prices.  For example:  brand-name medication that costs $300 per month might be sold as a generic for as little as $30 per month.  (This means that for one drug, patients may be paying 12 x $270 or $3,240 more per year because of the pay-for-delayed availability of the generic version.)

 

In the six fiscal years from 2004 through 2009, there were a total of 66 pay-for-delay agreements (or as they politely refer to them, “settlements”) in which brand-name companies paid generic companies to delay the availability of the generic drugs.  In the past two years alone, there have been 59 of these agreements, almost as many as in the previous six years.

 

The projected cost to Americans of this legalized bribery amounts to $35 billion over the next ten years.  What can be done to stop this? The answer is simple.  The Federal Trade Commission (FTC) has supported legislation to block business deals in which manufacturers of brand name drugs are directly or indirectly paying generic drug makers to delay competition from cheaper generic alternatives.

 

Perhaps if everyone gets the word out and contacts their local representatives and senators, asking why they are not supporting legislation (e.g. Senate Bill 27, the Preserve Access to Affordable Generics Act) something will change.  This should not be legal.  It would be one thing if there were no options available, but to know that a perfectly comparable alternative is readily available at a fraction of the cost is outrageous. There needs to be a change…sooner than later. Is this justice?

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