Big Pharma uses drug patent settlements as payoffs to generic rivals to delay competitive drugs

Thursday, August 23, 2012 by: J. D. Heyes
Tags: drug patents, generic drugs, Big Pharma

(NaturalNews) Once again, Big Pharma seems to be putting profits over patients, this time in a scheme to prevent cheaper generic drug alternatives from hitting the market sooner. Only this time, the Leviathan is on the side of we, the people.

In a friend-of-the-court (amicus) brief, the Federal Trade Commission said makers of name-brand medications that settle challenges to patents by agreeing not to introduce their own generic alternatives are actually using those promises to delay generic competition, Reuters has reported.

In the amicus brief the FTC - a regulatory agency - said such patent settlements, in which drug manufacturers promise not to introduce their own authorized generic drug versions are really just a way of paying a generic rival to keep their products off the market longer.

Conspiracy to delay generic entry into the market

The FTC's assertions came as a federal court in New Jersey - one that oversees a number of suits against Big Pharma - considers a private antitrust challenge to one such agreement between Pfizer, Inc.'s Wyeth unit and Teva Pharmaceutical Industries Ltd., the world's biggest manufacturer of drugs.

"Empirical evidence confirms what the pharmaceutical industry has long understood: that a no-(authorized generic) commitment provides a convenient method for branded drug firms to pay generic patent challengers for agreeing to delay entry," the FTC said in the proposed brief.

A court should "carefully consider the economic realities of no-AG commitments and their impact on consumers," the agency added.

The regulatory agency filed its brief in support of antitrust litigation filed by chain drugstores CVS Caremark Corp., and Rite Aid Corp., both of which accused Pfizer and Teva of a conspiracy to prevent generic versions of a popular antidepressant, Effexor XR, off store shelves.

In a statement, Pfizers Wyeth subsidiary refuted such allegations, saying its settlement agreement with Teva was correct and proper, and would allow a generic of Effexor XR onto the market a full seven years before its original patent expired.

The company went on to say that the FTC did not voice concerns about the settlement when officials with the agency originally reviewed it.

A spokeswoman from Teva told Reuters the company believes the suit has no merit and as such has filed a motion for dismissal.

But the two drugstore chains aren't the only retailers who believe something fishy is going on. Walgreen Co., Kroger Co., Safeway Inc., Supervalu Inc. and HEB Grocery Co., had similar misgivings about the settlement in a suit those companies filed in the same court in December.

The presiding judge in the Effexor case sought amicus briefs to assess how the case might be affected by a recent 3rd Circuit Court of Appeals ruling that said payments by a branded drug manufacturer to a potential rival generic drug maker can be "evidence of an unreasonable restraint of trade" if they prevented generic medications - which, of course, are generally much cheaper - out of the hands of patients.

Another case of keeping generics bottled up

This case is far from the first time Big Pharma has tried to keep cheaper, equally effective generic medications off the market.

In July, we reported that an alarming number of Big Pharma corporations are trying to hold on to their patented products for as long as possible - and in more cases, longer than allowed - because they don't want to see lower-cost options hitting the market.

That month, AstraZenica, was smacked by a federal judge for attempting to block the Food and Drug Administration's approval of generic versions of its antipsychotic drug Seroquel. The patent for Seroquel expired in March, but the company contended in federal district court in Washington that safety data it provided to the FDA so the agency would approve two additional pediatric uses for the drug forced it to re-label its packaging, reflecting a warning about hyperglycemia (high blood sugar). That re-labeling, attorneys for the drug manufacturer alleged, entitles the company to exclusivity through December 2012.

A federal judge, Beryl A. Howell, disagreed.

"AstraZeneca's interpretation would create a perverse incentive for pharmaceutical companies to drag out their presentation of vital safety data to the FDA in order to bar generic competition beyond the periods determined acceptable by Congress," he said in his ruling against the company.

Sources:

http://www.reuters.com

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