Senate to Debate Big Pharma Deals with Generics
One of the big topics recently has been the deals that some large pharmaceutical companies have struck with smaller generic firms to keep the generics off the market.
Senate bill aims to end deals that slow generics - Yahoo! News:
The article talks about the Senate plans to ban the deals made between brand name pharmaceutical companies and potential generic makers. This allows the brand name to continue making large profits and sometimes the generic maker makes more money in the short run than they would have made otherwise.
Here is a quote from Partick Leahy (D-VT)
“Congress never intended brand-name drug companies to be able to pay off generic companies not to produce generic medicines,” Leahy said at a Judiciary Committee hearing. “That would be a shame, harmful to consumers, and a crime.”
What is interesting is the increase in the number of such deals. In 2005 there were seven such deals; in 2006 that doubled to 14. Also recent court rulings such as an appeals court in Atlanta brought by the FTC about Schering-Plough illegally keeping a generic version of its K-Dur off the market were ruled against the FTC and for the pharmaceutical company. The US Supreme Court declined to take up the case. Another lower court also threw out a similar case involving Tamoxifen from AstaZeneca.
What is interesting is that some companies in the generics industry have come out against it also. The chairman of Barr Labs, Bruce Downey said the proposed bill;
will discourage vigorous challenges of patents because generic companies will lack the flexibility to settle some cases once they are filed.”
“The proposed bill therefore would undermine the incentives Congress has carefully created to promote generic competition,” Downey said.
I don’t know that I agree with that statement. His statement, to me, implies that sometimes the generic drug companies may really not have a case but it is a way to make the big pharma company pay them even if the generic company might not have a solid case. I think the purpose of the government incentives was to manufacture cheaper generic drugs, not to make money off of big pharma from stifling of competition.
The Pharmalive article covers the recent testomony of Federal Trade Commissioner Federal Trade Commissioner Jon Leibowitz . He said that the recent court rulings I mentioned above have made it more difficult for the FTC to proceed with antitrust cases in order to stop exclusion payments.
The Pharmagossip blog also recently had a posting on this topic.
PharmaGossip: Big Pharma payoffs to Generics companies - “somewhere between bribery and extortion”:
This posting is actually part of an editorial recently in the Star Ledger and can be found here. Given the number of really big drugs coming of patent in the next 4-5 years this practice is sure to get more lucrative for the generic drug makers and occur more frequently. It will be interesting to see if this gets through Congress and even then it will almost certainly face a presidential veto. This will be a interesting topic to cover in the coming months.
Technorati Tags: generic drug
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