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Sneaky deals are keeping cheaper generic medicines off the market
A bill — AB 824 — now making its way through the Legislature would prohibit agreements among drug companies involving "anything of value" changing hands to delay introduction of a generic alternative to a brand-name medicine.
The legislation already has been passed by the Assembly. It's scheduled to be voted upon Wednesday by the Senate Health Committee.
"We know these agreements happen. Everyone knows it," Assemblyman Jim Wood (D-Healdsburg), the author of the bill, told me.
[...] About 90% of all U.S. drug sales involve generics, which are intended to be cheaper alternatives to brand-name drugs once a sufficient amount of time has passed for the original maker to recoup its research and development costs.
Healthcare advocates say pharmaceutical companies figured out years ago that they can reap even greater profits by encouraging generic manufacturers to stay away from some of the most lucrative brand-name meds.
This is typically done by direct payments or promises of profit sharing, or by the brand-name maker pledging not to bring out its own "authorized" generic to compete directly with the generic manufacturer. The deals are often reached during settlements of patent litigation.
The Federal Trade Commission estimates that pay-for-delay deals cost American consumers $3.5 billion a year in the form of higher drug prices.
"Pay-for-delay agreements are 'win-win' for the companies," the FTC said in a 2010 study. "Brand-name pharmaceutical prices stay high, and the brand and generic share the benefits of the brand's monopoly profits."
A more recent analysis by the California Public Interest Research Group found that pay-for-delay deals keep cheaper generics off the market for an average of five years after patent rules allow their introduction.
This allows drug companies to charge for a brand-name med as much as 33 times what a generic alternative would cost, the analysis found.
(Score: 2, Interesting) by Anonymous Coward on Sunday June 30 2019, @05:42AM (3 children)
It's anti-trust law violation, and we outta busta their balls HARD
...
We get the government we deserve.
(Score: 0, Interesting) by Anonymous Coward on Sunday June 30 2019, @10:15AM (2 children)
No, sadly, it's not.
For something to be an anti-trust violation, there has to be a monopoly. And, not just a monopoly on "a thing", but on the ability to "make a thing".
But that's not what's happening here. There are loads, and loads, and loads of drug manufacturing companies who can make the drug! For example, this generic "knock off"? They can do it because the patents have expired, meaning *anyone* can start to make this knock off.
As long as they know how, and figure it out, and put the resources into it.
So, there is no monopoly. Hence, no anti-trust issue.
Note, I agree 100% that it's a clear flaw in free-market method. Yet, this sort of thing happens with ALL companies, ALL the time. It would happen with (for example) the tech world more often, but buyouts are far easier -- and often the people are just as important as the tech.
(Score: 0) by Anonymous Coward on Monday July 01 2019, @05:25AM
Fuck you ignint dope. You don't need to be a monploy, collusion is enough, the same way dram makers got nailed.
Double fuck you to the moron who mod this "interesting". Ignint moron.
(Score: 2) by Pino P on Tuesday July 02 2019, @01:15AM
If the incumbent manufacturer is refusing to release the samples required to perform a bioequivalence test, then the incumbent manufacturer holds the monopoly on the ability to "make a thing". This has happened for Daraprim and the like.