Pharmaceutical companies that pay rivals to keep less-expensive generic versions of best-selling drugs off the market can expect greater federal scrutiny after a recent US Supreme Court ruling that allows the Federal Trade Commission to sue pharmaceutical companies for potential antitrust violations.
Thanks to the Supreme Court ruling, cheaper versions of patented blockbuster drugs will likely begin reaching pharmacies faster; however it won’t put an end to “pay for delay” deals between pharmaceutical companies that keep generic drugs off the market.
Consumers Lose with Pay for Delay
With “pay for delay,” the maker of a brand-name drug pays a smaller drug maker to delay bringing to market a cheaper generic alternative, extending the brand name drug’s patent monopoly. Consumers, who pay $3.5 billion a year in drug prices, are the losers in this scheme.
Pharmaceutical sales in the United States in 2011 totaled $320 billion. Brand-name drugs accounted for 18 percent of the total prescriptions written by doctors in 2011 and 73 percent of consumer spending. When generic drugs are available, consumers can receive the full benefits of a competitive marketplace.