“Pay for delay” is Pharmaceutical Bribery

March 29, 2013 at 8:13 pm | Posted in Fairness | Leave a comment
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Nexium (esomeprazole magnesium) pills, 40 mg, photgraphed on 26 January 2007 by Shorelander.  This is not necessarily one of the drugs under discussion. Date 26 January 2007

Nexium (esomeprazole magnesium) pills, 40 mg, photgraphed on 26 January 2007 by Shorelander. This is not necessarily one of the drugs under discussion.
Date 26 January 2007

A recent article by Sarah Kliff in the Washington Post describes a common practice called “pay for delay”.

It is used when the patent expires on a drug maker’s very profitable drug.  The drug maker that formerly held the patent develops a patent dispute with a company that would have produced a generic version of the drug.  Then the suit is settled by the former patent holder paying the would-be producer of the generic version to delay producing and selling the generic version.

Would someone please explain to me how this is not bribery?

Functionally, it acts as a bribe paid by the company that formerly held the patent on the drug, and as acceptance of a bribe by the company that would otherwise have produced a generic version of the drug.

Both companies benefit.  Only the consumer is harmed.

The online version of Sarah Kliff’s article includes an instructive graphic showing how much this is costing the consumer.

The Editors of the Washington Post have argued that “pay for delay” constitutes illegal collusion.

The Federal Trade Commission is suing in the Supreme Court.

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