Tuesday, August 10, 2010

Editorial - Faint Progress on Drug Payoffs - NYTimes.com

Editorial - Faint Progress on Drug Payoffs - NYTimes.com: "The underhanded tactic, known as pay for delay, occurs when a generic drug company tries to bring its product to market by challenging the patents on a brand-name drug. Rather than engage in a costly and unpredictable court battle, the brand-name manufacturer sometimes pays the challenger substantial compensation to delay marketing its drug, and the generic company often welcomes the easy, risk-free money.

Both companies profit. The consumer, unfortunately, loses — by paying high, brand-name drug prices instead of lower prices for a generic. The Federal Trade Commission, which has been campaigning to end the practice, estimates that pay-for-delay agreements cost consumers at least $3.5 billion a year.

The bill pending in the Senate, which was incorporated into a general government appropriations bill, is similar to legislation already approved by the House. It would greatly curtail pay-for-delay practices by presuming that such agreements are illegal and anticompetitive while leaving an opportunity for the affected companies to overcome that presumption in court.

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