The Supreme Court and "Pay for Delay:" The Potential Impact on Pharma

In early December of last year, the U.S. Supreme Court agreed to hear a case to decide whether agreements between brand-name pharmaceutical companies and generic makers to delay the entry of generic drugs to the market—so called “pay for delay” deals—violate antitrust laws.  “In a typical case, a generic rival challenges the patent of a brand-name competitor, which then pays the rival a sum of money to drop its challenge,” reported Reuters.   Patents on drugs can last as long as 20 years and drug companies can sometimes extend the protection for their products by obtaining separate patents for a coating or a slightly different product that includes inactive ingredients.  In 1984, Congress passed the Hatch-Waxman Act to help speed the introduction of low-cost generic drugs to market.”  The legislation encouraged generic makers to contest the extended patents for costly drugs because typically, “when a generic firm puts a copycat version on the market, the price for the drug immediately drops about 30%.  When more than one generic maker is competing for sales, the price of the original brand-name drug can fall as much as 90%.”  As a result, the maker of a brand-name drug has a huge incentive to try to preserve its monopoly as long as possible.  Under the Act, the first company to win UFDA approval to sell a generic drug before the underlying patent expires has a 180-day exclusive right to market that product.  This incentive, however, has created ...
Source: Policy and Medicine - Category: Health Medicine and Bioethics Commentators Authors: Source Type: blogs