The Star-Ledger
July 12, 2013
The pharmaceutical industry's penchant for paying to delay generic versions of brand-name drugs has meant New Jerseyans have paid on average 10 times more than they should have for top-selling medications to fight cancer, heart disease and other conditions, according to a report released yesterday.
Blockbuster medications such as Adderall, Cipro, Lipitor and Zantac remained without low-cost alternatives for up to seven years after their manufacturer lost patent protection because of lucrative deals struck with generic competitors, said the report, produced by New Jersey Public Interest Research Group and Community Catalyst.
The study reviewed "pay-for-delay" deals that involved 20 brand-name drugs. Generic versions of those listed prescription medications were delayed for five to nine years, according to the report, "Top Twenty Pay-for-Delay Drugs: How Drug Industry Payoffs Delay Generics, Inflate Prices and Hurt Consumers."
Drug giants such as Merck, Bayer, Bristol-Myers Squibb, AstraZeneca and Pfizer made an estimated $98 billion in combined sales from the medicines while generic versions were delayed, the report said.
"Because of this, people in New Jersey pay inflated drug prices, or go without necessary medication," NJPIRG advocate Jen Coleman said.
It cited as a case study the sleep disorder drug Provigil, whose generic version was expected in late 2005. Its manufacturer, Cephalon -- which has since been purchased by Teva Pharmaceutical Industries -- paid more than $200 million to four generic drug companies to keep it off the market until last year, with patients having to pay up to $1,200 a month for the drug.
While controversial, pay-for-delay deals had been legal until last month, when the U.S. Supreme Court ruled the agreements may violate antitrust law, opening the drug industry to lawsuits. Because the Supreme Court chose not to declare all such payoffs unlawful, consumer advocates have called on Congress to pass legislation ending the practice.
Actavis, a Parsippany-based generic drugmaker, had entered into a pact with the maker of a drug now under the control of AbbVie to postpone a generic version of testosterone-replacement drug AndroGel.
Generic drugmakers such as Actavis have benefited recently from the expiration of patents protecting top-selling drugs such as the cholesterol fighter Lipitor. But many companies are competing for that revenue source, and analysts expect it to start drying up over the next few years.
The Federal Trade Commission wanted to prohibit all pay-for-delay agreements, saying that such deals stifle competition and prevent consumers from saving as much as $3.5 billion a year in drug costs. According to the FTC, more than 140 brand-name drugs have been delayed because of deals between drug manufacturers since 2005.
The report's list of 20 drugs was compiled from information made public in consumer class-action lawsuits, FTC legal challenges, research by legal experts and public disclosures by drugmakers, said Wells Wilkinson of Community Catalyst.
In the case of Pfizer's blockbuster drug, Lipitor, the study found its generic equivalent was delayed nearly two years. Lipitor had annual sales of more than $7 billion before striking a deal with Ranbaxy Laboratories, which introduced its generic version in late 2011. When that happened, a 30-day prescription fell from $205 to $18.
Pfizer spokesman Christopher Loder denied any pay-for-delay deal -- or "reverse payment," as he called it -- in its bargain with Ranbaxy.
"Pfizer is confident that the procurement and enforcement of its Lipitor patents were at all times proper and lawful," he said yesterday.
The pharmaceutical industry's penchant for paying to delay generic versions of brand-name drugs has meant New Jerseyans have paid on average 10 times more than they should have for top-selling medications to fight cancer, heart disease and other conditions, according to a report released yesterday.
Blockbuster medications such as Adderall, Cipro, Lipitor and Zantac remained without low-cost alternatives for up to seven years after their manufacturer lost patent protection because of lucrative deals struck with generic competitors, said the report, produced by New Jersey Public Interest Research Group and Community Catalyst.
The study reviewed "pay-for-delay" deals that involved 20 brand-name drugs. Generic versions of those listed prescription medications were delayed for five to nine years, according to the report, "Top Twenty Pay-for-Delay Drugs: How Drug Industry Payoffs Delay Generics, Inflate Prices and Hurt Consumers."
Drug giants such as Merck, Bayer, Bristol-Myers Squibb, AstraZeneca and Pfizer made an estimated $98 billion in combined sales from the medicines while generic versions were delayed, the report said.
"Because of this, people in New Jersey pay inflated drug prices, or go without necessary medication," NJPIRG advocate Jen Coleman said.
It cited as a case study the sleep disorder drug Provigil, whose generic version was expected in late 2005. Its manufacturer, Cephalon -- which has since been purchased by Teva Pharmaceutical Industries -- paid more than $200 million to four generic drug companies to keep it off the market until last year, with patients having to pay up to $1,200 a month for the drug.
While controversial, pay-for-delay deals had been legal until last month, when the U.S. Supreme Court ruled the agreements may violate antitrust law, opening the drug industry to lawsuits. Because the Supreme Court chose not to declare all such payoffs unlawful, consumer advocates have called on Congress to pass legislation ending the practice.
Actavis, a Parsippany-based generic drugmaker, had entered into a pact with the maker of a drug now under the control of AbbVie to postpone a generic version of testosterone-replacement drug AndroGel.
Generic drugmakers such as Actavis have benefited recently from the expiration of patents protecting top-selling drugs such as the cholesterol fighter Lipitor. But many companies are competing for that revenue source, and analysts expect it to start drying up over the next few years.
The Federal Trade Commission wanted to prohibit all pay-for-delay agreements, saying that such deals stifle competition and prevent consumers from saving as much as $3.5 billion a year in drug costs. According to the FTC, more than 140 brand-name drugs have been delayed because of deals between drug manufacturers since 2005.
The report's list of 20 drugs was compiled from information made public in consumer class-action lawsuits, FTC legal challenges, research by legal experts and public disclosures by drugmakers, said Wells Wilkinson of Community Catalyst.
In the case of Pfizer's blockbuster drug, Lipitor, the study found its generic equivalent was delayed nearly two years. Lipitor had annual sales of more than $7 billion before striking a deal with Ranbaxy Laboratories, which introduced its generic version in late 2011. When that happened, a 30-day prescription fell from $205 to $18.
Pfizer spokesman Christopher Loder denied any pay-for-delay deal -- or "reverse payment," as he called it -- in its bargain with Ranbaxy.
"Pfizer is confident that the procurement and enforcement of its Lipitor patents were at all times proper and lawful," he said yesterday.