Drugmakers "increase prices to consumers by billions of dollars a year" by paying potential rivals not to make cheap generic versions of popular medicines - and Congress, and now the courts, have been "walking away from aggressive scrutiny" of the practice, writes Rutgers-Camden law school professor Michael A. Carrier.
In April, Carrier wrote me in a note last night, "a panel of three Second Circuit judges upheld a settlement involving the antibiotic ciprofloxacin hydrochloride (Cipro), the blockbuster drug used to treat bacterial illnesses," but urged the plaintiffs to appeal to the full circuit.
"Bayer had paid $398 million to firms interested in making generic versions of Cipro in return for the generics agreeing not to enter the market during the term of Bayer’s patent." Citing an earlier case re the breast-cancer drug Tamoxifen, the New York-based circuit court approved of Bayer's Cipro deals. But "because of the ‘exceptional importance’ of the antitrust implications" of paying companies not to make drugs, "we invite plaintiffs-appellants to petition for rehearing" on the broader public issues.
They did - only to deny a full review in a decision yesterday. "The court did not give its reasons, but one judge, Rosemary Pooler, issued a blistering dissent that the issue 'deserves reexamination.'
"A major concern with the Bayer settlement is its inclusion of a 'reverse payment.' ... By delaying generic entry, the (original manufacturer) dramatically increases its monopoly profits and uses a portion of these profits to lavish windfalls" on generic drugmakers. Like paying farmers not to grow crops.