The US Federal Trade Commission says that a ban on ‘pay for delay’ agreements between brand-name and generic manufacturers could cut spending on pharmaceuticals by billions of dollars a year.
The FTC’s chairman Jon Leibowitz says that an internal analysis projects that stopping what he describes as “collusive” settlements between brand and generic pharmaceutical firms would save consumers $3.5 billion a year. He added that a ban would also reap significant savings for the federal government, which pays around one-third of all prescription drug costs in the USA.
Mr Leibowitz said that “the decision about whether to restrict pay-for-delay settlements should be simple”. He went on to claim that “on the one hand, you have savings to American consumers of $35 billion or more over ten years…and the prospect of helping to pay for health care reform as well as the ability to set a clear national standard to stop anticompetitive conduct”. On the other hand, “you have a permissive legal regime that allows competitors to make collusive deals on the backs of consumers,” he added.
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