Supreme Court Decision Could Mean Faster Generic Drugs

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While the case isn't getting as much attention as gay marriage, the financial impact could be measured in billions.

Last week the Supreme Court began hearing arguments in two cases about gay marriage. While that drew a lot of attention, whatever the justices decide won’t have much direct effect on you unless you’re gay, or have a strong opinion on the subject.

That’s not true of another big case, this one about generic drugs. As NPR reports, the court also has to decide whether or not brand-name drug makers can continue their “pay to delay” schemes.

Over the past decade it’s become more common for brand-name companies to give their generic competition millions of dollars to stay off the market. As we’ve written before, the FDA already grants years of exclusivity to new drugs, which get heavily promoted and entrenched before cheaper copies can enter the market. But even after they can debut, big brands extend their monopoly through legal settlements with the generic brands.

Brand-name drug maker Solvay tweaked the formula for a prescription testosterone gel (AndroGel) whose patent had expired long ago; they figured they could make it just different enough to get a new patent and block competition. Generic competitors challenged it, and one of them was prepared to launch a product that cost one-sixth of Solvay’s. So Solvay offered the generics a combined $42 million a year to back off.

They said sure, we’ll make more money that way – fine. Business as usual, done deal. How’d this wind up in the Supreme Court? Because the Federal Trade Commission stepped in and said it’s not right.

So the government is now making the case that generics are purposely giving up in legal battles and keeping cheaper options out of consumer hands because it’s more profitable for them to do so. If the justices ultimately agree, it could mean cheaper healthcare for many of us.

Stacy Johnson

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