The drug industry engages in a wide variety of questionable activities in my opinion. Most of the time these activities proceed unchecked with little-to-no recourse for the company. Finally Congress decided to do something about one particular questionable activity called “pay-for-delay deals”, a common practice in the industry.
Say a drug company markets a drug called “Drug X”. The company usually gets a patent on Drug X for a period of 20 years. This means that the drug company can be the only one to sell Drug X for 20 years. When the 20 years ends other drug companies can make the drug but can’t use the name Drug X. So the same drug without the name is called a generic. If the drug company wants to keep Drug X all to itself it will pay the other companies to not create a generic. This is a pay-for-delay agreement. Ã‚Â Pay-for-delay is an agreement between pharmaceutical companies keeps the cost of drugs high by limiting competition. It is simple economics – if you need a particular drug and you only have one option then you will pay whatever the cost to get that drug. In my opinion this practice should be stopped and the government is finally doing something about it.
Democrat Herb Kohl and Republican Charles Grassley co-sponsored The Preserve Access to Affordable Generic Drugs Act (S 369) which bans the pay-for-delay practice. The act was passed by a 15-15 vote. Ã‚Â Welcoming the vote, Sen Kohl said that the cost of brand-name drugs rose nearly 10% last year while the cost of generic drugs had fallen by nearly 10%. Ã¢â‚¬Å“At this time of spiraling health care costs, we cannot turn a blind eye to these anticompetitive backroom deals that deny consumers access to affordable generic drugs,Ã¢â‚¬Â said the Senator, who chairs the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights.