Issue Date: June 2, 2008
Generic Drug Delays Continue
Brand-name drugmakers continue to use legal settlements with generic pharmaceutical companies to delay cheaper drugs from entering the market, according to a new report from the Federal Trade Commission's Bureau of Competition. In 2007, there were 33 settlements between brand-name and generic drug companies, the report states. Nearly half of those involved brand-name companies compensating generics makers for keeping their products off the market for a specified amount of time. Consumer groups and FTC claim that such settlements restrict competition and allow pharmaceutical companies to make windfall profits at the expense of consumers. FTC supports legislation that would ban such settlements. The pharmaceutical industry counters that the settlements benefit consumers. "Settlements resolve costly and time-consuming patent litigation and often allow the generic version of a medicine to enter the market before the patent is due to expire. Basic economics shows us that this can help increase competition between brand-name and generics companies, lower costs for American consumers, and increase access and choice for patients," Ken Johnson, a senior vice president for the industry group Pharmaceutical Research & Manufacturers of America, said in a statement.
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