Friday, June 21, 2013

Left Side of the Aisle #113 - Part 3

Good news #3: SCOTUS says drug companies' "pay for delay" deals can be challenged as violating antitrust laws

The third SCOTUS decision is one that got much less notice than the others, but could - could - have a real impact on the cost of medications for Americans.

The big pharmaceutical corporations have become notorious for manipulating the patent laws to keep their greedy hands in our pockets. Patents on drugs usually last for 20 years but BigPharma has often succeeded in getting patents renewed by claiming a "new use" for an existing drug (thus extending the monopoly) or in getting a new patent for a "new" drug which is nothing but a minor reformulation of an existing one.

Generic drug makers sometimes challenge these patents on various grounds; if a challenge succeeded, it would enable a generic version of the drug to be on the market years sooner than it would otherwise. The brand-name makers usually respond by suing the generic maker. So they reach a "compromise" under which the brand-name maker pays the generic maker a sometimes hefty settlement in exchange for the generic version being held off the market for some number of years. The overall effect is that the extremely over-priced brand name drugs for which there is no generic alternative continue to be big profit centers for BigPharma and big drains on the budgets of many, particularly seniors.

Drug companies had wanted the Supreme Court to immunize these agreements from possible antitrust attack in court. By 5-3, the Court said no. The ruling said that "precedents make clear that patent-related settlement agreements can sometimes violate antitrust law," which would make them illegal.

The Court resisted motions to make all such so-called "reverse payment settlements," or "pay-for-delay" deals as they're sometimes called, illegal, but did say they can be challenged. And as their invariable result is to guarantee a delay in a generic alternative reaching the market, that's good news.


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