Justinian C. Lane, Esq.
Let Justice Be Done, Though the Heavens May Fall

Justinian Lane's Blog

Justinian's Blog

Lawsuits keep affordable medicines out of the hands of consumers

The "reform" movement often argues that lawsuits keep pharmaceuticals from selling life-saving medicines to the general public.  Guess what?  In some instances, they're right.  

Pharmaceutical companies eager to keep less expensive alternatives to their drugs off the market are increasingly reaching legal agreements with generic drugmakers to accomplish that goal, a government agency said Wednesday.

More than 30 patent lawsuits were settled in the 12 months ending last Sept. 30 between brand-name drug companies and generic manufacturers, the Federal Trade Commission said. Fourteen of those settlements included both a restriction on the generic company's ability to market a drug and compensation to the generic manufacturer, the agency said in an annual report.

The FTC says that by jamming the pipeline of cheaper drugs, such agreements harm consumers. The agency has sued to block some settlements and is supporting legislation in Congress that would ban the practice.

The FTC has had limited success in thwarting what it calls "pay-for-delay" settlements. Two appeals courts ruled in 2005 that similar agreements reached by Schering Plough Corp. and Astra Zeneca PLC with generic companies were legal.

Settlements with restrictions on generic drugmakers increased from three in fiscal year 2005 to 14 in 2006, the same total as last year, the agency's report said. Drug companies are required to report the settlement of patent litigation with generic drugmakers under a 2003 law.

"Pay-for-delay settlements continue to proliferate," FTC Commissioner Jon Leibowitz said in a statement. "That's good news for the pharmaceutical industry, which will make windfall profits from these deals. But it's bad news for consumers, who will be left footing the bill."

FTC: Legal settlements delay cheaper drugs

I wrote about a similar practice, sometimes called "reverse payments," back in April of 2007.  Doesn't it seem more than a little unfair to allow pharmaceuticals to pay companies not to market drugs?