Monopoly, It's the Big Pharma Business Model

Kristen Sparrow • March 25, 2013

Thinker in painThis will be awesome for the Drug Companies and awful for patients and their wallets.  Given this Supreme Court, they’ll probably let the drug companies do whatever they want. Freedom. (In short, the makers of “blockbuster drugs” will pay generic drug makers to keep their cheaper version off the market in turn for profit sharing on the exorbitant cost of the original drug.)

March 24, 2013Justices to Look at Deals by Generic and Branded Drug Makers
By EDWARD WYATTWASHINGTON — Just about anyone who has gone to a pharmacy and paid for a prescription knows that a generic copy costs much less than the brand-name drug. The makers of those two versions of a drug, therefore, usually compete fiercely for market share and profits.But at the Supreme Court on Monday, the generic and the brand-name drug companies will be on the same side, arguing against the federal government in the legal equivalent of a heavyweight title bout.The case, Federal Trade Commission v. Actavis, No. 12-416, centers on whether the maker of a brand-name drug can pay a generic-drug company to keep the generic version off the market. Based on antitrust law, the obvious answer would seem to be no,.. “Everybody wants to believe that the big drug companies are bad, that they’re giving us these piles of money to stay off the market,” said Paul M. Bisaro, chief executive of Actavis, whose generic version of AndroGel, a testosterone replacement therapy, is the subject of the case. “But these payments have saved consumers billions and billions of dollars.according to IMS Health, a research company whose statistics the agency cites in its arguments.Brand-name drugs accounted for only 18 percent of thThe agency says in its court briefs that the opposite is true: the payment” “allows the brand-name manufacturer to co-opt its rival by sharing the monopoly profits that result from an artificially prolonged period of market exclusivity.”The stakes in the dispute are huge. Pharmaceutical sales in the United States totaled roughly $320 billion in 2011, …When a generic version of a brand-name drug comes onto the market, the F.T.C. said, it costs about 15 percent of the original, causing the brand-name drug maker to quickly lose about 90 percent of its market share.