Published On: July 7th, 2009
The heat is closing in on the drug indsutry’s practice of paying generic manufacturers to delay competition for branded drugs.
Companies say the practice is legal. But the U.S. Department of Justice took a skeptical view when it weighed in Monday on a pending case brought by CVS and Rite Aid. The drug stores (which make higher margins on generics) challenged a deal in which Bayer paid Barr to delay producing a generic version of the antibiotic Cipro. Here’s more on the case from Dow Jones Newswires.
The Federal Trade Commission has been attacking the deals for a while now — witness Bristol-Myers Squibb’s $2.1 million payment earlier this year to end the FTC probe into its negotiations to delay the entry of generic Plavix.
Meanwhile, on the other side of the Atlantic, the European Competition Commissioner is expected to release a report this week on competition in the drug industry, notes Bloomberg News. The report is likely to take a hard look at the pay-for-delay deals — a preliminary report that was part of the same investigation found hundreds of settlements between 2000 and 2008, 48% of which “restricted” the generic company’s ability to market a drug.
Photo: iStockphoto

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Scrutiny on Two Continents for ‘Pay for Delay’



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