Wednesday, November 14, 2007

AP on reverse payments to delay entry of generic drug

FREDERIC J. FROMMER (AP) noted of the reverse payment issue under Hatch-Waxman:

The Senate bill would ban most settlements known as "reverse payments," in which a brand-name company pays a generic manufacturer to delay the introduction of the generic drug. The Federal Trade Commission, which has called on Congress to take action, says such settlements could cost American consumers billions of dollars.


In one of those cases, Barr Laboratories Inc. abandoned its successful challenge to AstraZeneca PLC's patent for the breast cancer drug tamoxifen. In exchange, Barr received a $21 million payment and entered an agreement with AstraZeneca under which Barr sold generic tamoxifen provided by AstraZeneca.

Consumers filed a lawsuit challenging the agreement. The 2nd U.S. Circuit Court of Appeals upheld a federal judge who had concluded that the agreement did not violate federal antitrust laws. In June, the Supreme Court refused to take up an appeal.

A plaintiff in that case, Helen Donega of North Adams, Mass., said she was saving only about 5 percent off the brand-name price when she purchased the Barr generic tamoxifen in 1998 and 1999. Donega, who had insurance through Medicare but no drug coverage, said she had to pay between $85 and $90 a month for the drug.

Of some details of Sen. Herb Kohl's bill:

Not all patent litigation settlements between generic and brand name companies involve payments, and Kohl's bill bans only those where the generic company receives something of value. The legislation would allow, for example, a deal in which the two sides merely compromise on the date that a generic can enter the market. And Kohl recently agreed to add a provision that would exempt some reverse payment settlements if the FTC determines they would benefit consumers.

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