Health Care

Deals Slow Generic Drugs

Time is money, the saying goes. But for big drug companies, more time means more money, at least in sales dollars from keeping generic drugs for the same use at bay. In an unusual advisory comment, a US Court of Appeals recently said this practice should be looked at in detail.

The Federal Appeals Court Speaks

A federal trial court rejected Bayer AG's deal paying Barr Laboratories to hold off marketing a generic version of Cipro. The Second Circuit Court of Appeals in New York agreed with that decision.

In its decision, the Court followed a 2005 precedent, but it pointed out a window of opportunity for change. It also remarked that Bayer could ask for a rehearing involving the entire Court of Appeals for New York weighing in on the decision. The Court hinted a rehearing would probably be allowed, noting that the case was of "exceptional importance" to antitrust concerns.

The Federal Trade Commission (FTC) was glad for the invitation. They've been waging war against these "pay for delay" deals for a long time. The FTC Chair, Jon Leibowitz, called it a good sign that courts are frowning on pay-for-delay settlements. He said these deals cost American consumers $3.5 billion per year in higher prescription drug prices.

Generics in the News

The 2005 court case that the New York Court of Appeals mentioned involved the widely used drug Tamoxifen. It's prescribed for a wide range of conditions, from breast cancer to infertility. The FTC reports that in 2009, a total of 19 "pay for delay" settlements occurred where brand name drugs kept their hold on the market and generics were kept off the market.

The process of getting a patent is a lengthy, cumbersome and complex process. Patent agents and patent attorneys are involved, as is the US Patent and Trademark Office. Despite the lengthy process, many big drug makers work out deals to hold off introducing generic drugs. These cut away at their profits for brand-name drugs that cost consumer a lot more money.

Pharmaceutical companies put a lot of time and effort into researching and developing new drugs. In addition to this, they go through testing, clinical trials and then FDA approval. Depending on how long each of these steps takes, and whether companies have to go back to "get it right," makes a drug more and more expensive to the consumer.

The Battle for Generics

Many consumers don't want to give up their comfort level with the well-known brand names. They want to be sure the medication they're taking will give them the same effect they expect. So many people shy away from generic drugs.

However, many people are opting for the generic versions now that drug prices are rising along with many other consumer goods. Some insurance companies will only allow the generic version if it's available and that could be an issue, too. Ask your doctor or pharmacist whether there's any difference with the generic version of any drugs you're taking.

Your physician is the ultimate decision-maker on whether generic drugs are acceptable. They'll likely make a note on your prescription as to whether generics can be substituted. Remember that pharmaceutical companies spend a lot of time and money courting doctors for their business.

Many pharmacy reps "shadow" a physician, following him as he treats patients, and gather information on prescription patterns. They can use the information to urge more prescription-writing of their brand. Without the same name recognition, smaller drug labs won't have a sales pitch to match their brand-name rivals.

Whether the pay-for-delay deals are forbidden remains to be seen. In the meantime, consumers should stay informed about their choices and find out what is best for them.

Questions for Your Attorney

  • How much can generic drugs differ from brand name drugs?
  • Can I sue a drug company to allow a generic drug to become available, or do I have to go through the FTC?
  • What if my doctor doesn't allow the generic version, but my insurance company won't pay for the name brand?
Have a health care question?
Get answers from local attorneys.
It's free and easy.
Ask a Lawyer

Get Professional Help

Find a Health Care lawyer
Practice Area:
Zip Code:
How It Works
  1. Briefly tell us about your case
  2. Provide your contact information
  3. Connect with local attorneys

Talk to an attorney

How It Works

  1. Briefly tell us about your case
  2. Provide your contact information
  3. Choose attorneys to contact you