Every morning I swallow a bitter pill. Actually, the medicine itself isn't all that bitter. It's no different from any of the other medicines I take that make it possible for me to function at home and at work by controlling things like allergies and gastro esophageal reflux disease. It didn't actually taste any differently this morning than it does any other morning. At least not in the literal sense.
I've been reluctant to sit down and figure out how exactly much my medicines cost me every month, but my co-pays add up to somewhere between $150 to $200 per month, after insurance. That's not a whole lot compared to what many other people pay, I admit. Still, anytime there's a chance of reducing a monthly expense, I'm happy.
So, I was happy to hear it when my husband (a doctor) told me earlier a few years ago that the medicine in question — the most expensive of my prescriptions, was set to go generic in 2010. It would mean lower prescription costs for me and my insurer. (Actually, it would have meant bigger savings for my insurer, though my co-pay for that prescription would go down by about half.)
Well, late last week, my husband gave me the bad news. After perusing the latest medical news, he informed me that the prescription won't go generic for at least another three years. Why, because the big pharmaceutical company paid off the generic manufacturer.
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The vehicle for these deals is patent litigation. When a generic drug is approved to come to market, the maker of the more expensive name-brand drug sues the generic for patent infringement. But instead of a conventional settlement, in which the generic pays the patent-holder to settle the claim that it infringed the patent, the payment goes the other way: the patent-holder pays the maker of the generic, in exchange for a pledge to delay bringing the generic to market. That suggests the patent-holder fears its patent wouldn't hold up in court, as many don't. And it runs counter to the intent of the Hatch-Waxman Act of 1984, which sought to speed the path of generics to market, and to provide a legal framework for these cases.
So common have these deals become lately that they've been given a name: pay-for-delay. The approach — a textbook anti-competitive tactic — is worth billions to drug-makers, because it essentially allows them to buy more protection than their patent confers.
Tell me again, about the wonders of the free-market. Talk about "profits over people." To hear Big Pharma tell it, this is supposed to be a "win-win" situation.
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In other words, "pay-to-delay" settlements shorten lawsuits, thus theoretically lowering legal costs for the pharmaceutical companies, which then pass those savings on to consumers. Theoretically. But as Zach Roth points out above, the "pay-to-play" settlements strongly suggest that big pharmaceutical companies' patently claims would not stand up in court. And big pharma seems to be jacking up prices anyway, to get get ahead of health care reform. ...
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