understanding drug pay-for-delay deals

Came across an interesting article by Bill Hogan in the September 2012 AARP Bulletin titled ‘A Big Step to End Drug Pay-for-Delay Deals’ .

You may be wondering, ‘What is a drug pay-for-delay deal?’

Basically manufacturers of brand-name drugs pay their rivals to keep lower-cost generics off the market.

What does that definition reveal to you? First, the rivals have the right to begin producing the lower cost generics of the brand-name drugs but second, choose to take a payoff instead.

From the article referenced above; “The pharmaceutical industry argues that the negotiated agreements avoid costly patent litigation and actually allow generic drugs to reach the market sooner. But the (Federal Trade Commission) FTC says the deals delay the introduction of generic drugs on average by 17 months.”

This battle pitting the brand-name drug manufacturers and generic drug manufacturers vs. drug wholesalers and retailers is making its way through the appellate courts and seems eventually to be headed for the Supreme Court. Once again from the article above: “In July, a federal appeals court found ‘pay for delay’ agreements … to be anticompetitive, as drug wholesalers and retailers claimed in a lawsuit. Because three other appeals courts have upheld the deals, experts say, the issue is likely to be settled by the nation’s highest court.”

From this article, it appears the Federal Drug Administration (FDA) is unsurprisingly silent on the topic – which only seems to confirm what many believe and proclaim, especially where cancer drugs are concerned, that they are strongly aligned with large pharmaceutical companies. (Note: I am personally impacted by shortages on cancer drugs due to the lack of generics and the absence of a generic brand on the blood pressure medicine I have been taking for seven years.)

Here are two more paragraphs I’d like to share from the AARP Bulletin article by Bill Hogan in the September 2012 edition …

“For more than a decade, the Federal Trade Commission has been unsuccessfully fighting to restrict pay-for-delay agreements. (So government agencies don’t always win … BW) The FTC estimates that the deals, which delay the introduction of lower-cost generics, cost consumers at least $3.5 billion a year.”

“Sens. Herb Kohl (D-Wis) and Chuck Grassley (R-Iowa), who last year introduced legislation that AARP supports to make pay-for-delay deals illegal and provide the FTC with the authority to stop them, cheered the court’s ruling. Kohl called it “a big step toward ending an unfair and abusive business practice that keeps generic drugs off the shelves and costs consumers and taxpayers billions of dollars.”

And under Obamacare that becomes an even more critical cost issue to both taxpayers and government …

Wondering about the power of big pharmaceutical companies? Holding the FTC and competitors at bay in the federal courts … and holding federal legislation at bay as well … there is little doubt who has the power and who is in control.

Thoughts, comments and additional info to be considered?

Thanks to the AARP and Bill Holt for this educational article!



About bwebbjr

A grandfather, father, husband, man, and a child of God who is following Christ Jesus and working out his salvation with fear and trembling; for it is God who is at work IN me, both to will and to work for His good pleasure (Philippians 2:12-13). I dodged my first bullet with cancer when a cancerous polyp was removed in a sigmoid colectomy surgery in August 2007. Four years later, in the midst of a second colectomy surgery we discovered I had Stage IV metastatic colon cancer. Rather than colectomy surgery I had colostomy surgery, which now means the colostomy bag is a part of my everyday life ... with the emphasis on life. God has given us a peace beyond understanding as my wife and I have traveled this journey. By the grace of God I am blessed to be a 6 plus year cancer survivor aka warrior. In writing, I am often wrestling with my own personal struggles and beliefs and in the midst God leads me to a lesson He wants me to learn ... or sometimes He simply touches me in the revelation of Himself. My hope is that the result you see here might touch your heart and glorify God. And let me be clear ... I am not the only one with something to say. Please join in the conversation sharing your faith, your cancer experiences, etc. I would love to hear from you. Bernie
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