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Supreme Court: Drug Companies Can be Sued for "Pay to Delay" Deals


Tuesday, June 18, 2013   

WASHINGTON - The U.S. Supreme Court ruled Monday that drug companies can be sued by federal regulators for antitrust violations if they make deals with generic drug manufacturers to keep a less-expensive generic version off the market when a patent expires.

According to Leigh Purvis, co-author of a recent AARP Rx Price Watch report, one case they identified involved Pfizer and its cholesterol drug Lipitor. Purvis said millions of people taking Lipitor had to pay higher prices.

"They were effectively stuck with the name brand for longer than they should have been, given the terms of the patent," she said.

Purvis, who tracks prices of prescription drugs commonly used by AARP members, said that, with a lot of blockbuster drugs due to come off patent soon, AARP is concerned drug companies will attempt to use questionable practices to ensure that their profits remain high.

John Charles, a Greenwood, Indiana retiree and longtime Lipitor user, said he ended up paying a lot more before the generic came out.

"Prior to the generic becoming available it was $70 for a three-month supply and now it's $15. Now that's a dramatic difference," he declared.

Leigh Purvis remarked that her research shows that retail prices for Lipitor continued to escalate before the expiration of the patent.

"Price increases of 17.5 percent in the year the patent expired is pretty impressive, so the fact that they were doing that on top of kind of blocking the generic is particularly egregious," she said.

According to the senior strategic policy advisor at the AARP Public Policy Institute, major retailers have filed suit against Pfizer and Ranbaxy Laboratories - the first company to launch a generic version of Lipitor - accusing them of violating antitrust laws by striking a deal to keep generic versions off store shelves.

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