Buying Off The Competition

There are two stories in the Washington Post today about drug companies. One is a blow job to the glory that is Big Pharma, a press release-as-news story almost entirely based on a study from the "Pharmaceutical Research and Manufacturers of America" that claims that drugmakers are increasingly targeting rare diseases.

Well, that's great. I'd rather see new drugs on the market for Crohn's Disease or leprosy than erectile dysfunction (again).

That story's on A2. Over on A12 we see some actual reporting, and the news that drug companies are paying generic manufacturers not to produce cheaper versions of their products.

Brand-name drug companies have resumed the practice of slowing the sale of cheaper generic competitors by cutting deals that result in paying millions of dollars to makers of generic drugs while consumers continue to pay brand-name prices.

The agreements follow two federal appeals court rulings last year that rejected Federal Trade Commission actions that since the late 1990s had prevented brand-name companies from paying their rivals to drop patent challenges.

So, after getting some favorable court rulings (activist judges!), Big Pharma has resumed the practice of subsidizing the generic drug industry, their main competitor, basically bribing them not to produce in order to maintain a monopoly. Even the FTC is shocked by this:

Speaking yesterday in Philadelphia, FTC Commissioner Jon Leibowitz said that if the appeals court decisions remain in force, rival drugmakers will have "carte blanche to avoid competition and share resulting profits." He said the commission had agreed to ask the Supreme Court to overturn one of the lower-court decisions.

"Until recently, payments by brand-name companies to generics were the exception, but now they're the rule," he said in an interview after his speech. "They appear to be a new way to do business, and that's very troubling. Hopefully the Supreme Court will take our case and reverse."

Mind you that drug companies already have a 20-year monopoly on any new product via the patent system. That's not good enough for them, as they fight tooth and nail to maintain these patents, and keep generic drugs off the market. Now they've figured out that they might as well just buy them off. This is good for Big Pharma, good for the generics, and absolutely abominable for consumers. It essentially stifles competition and creates a Drug Trust.

Now we go back to the story from A2... remember the sponsor of the study on how wise and benevolent and generous the pharmaceutical industry is? The Pharmaceutical Research and Manufacturers of America? Well...

The two organizations that represent the industries -- the Pharmaceutical Research and Manufacturers of America and the Generic Pharmaceutical Association -- declined to comment yesterday on the FTC report and the commissioner's comments.

There's really no way to lobby the Supreme Court to take this case and overturn it, so I'm kind of at a loss for an action item here. I'm just angry as hell.