Wednesday, May 28, 2008

Big Pharma using excess profits to stall generics

Excess profits exist where monopolies exist. The federal Government grants drug companies monopolies for drugs they develop via patent laws. These government created monopolies result in excess profits. The drug companies then use these profits to buy off generic drug companies, paying them to agree not to offer generics.

The government granted patent monopoly period should be dramatically shortened or abolished.

Makers of brand-name prescription drugs reached 14 agreements with makers of generic drugs to delay the generic drug makers entry into the market, according to a new report released by the Federal Trade Commission. The FTC says these deals, which it has dubbed 'pay-for-delay,' are harmful to consumers, but it hasn't been very successful in blocking them to date. The agency is on record as supporting legislation that would ban such deals, but such measures haven't made much progress on the Hill due to opposition from both brand-name and generic drug makers.