Big Pharma buying off generics

Just in time for seniors across the nation to be locked into the GOP's notoriously labyrinthine and highly inequitable Medicare Drug Plan, we have word that the drug companies are finding a new way to increase their already-sizable profits.

Under federal law, drugmakers are allowed to seek U.S. Food and Drug Administration approval for generic versions of brand-name drugs before a drug's patent expires. They must certify that the patent is invalid or will not be infringed by the new generic version.

However, in one key decision last year, an appeals court in Atlanta overturned an FTC ruling that said Schering-Plough Corp. had illegally kept cheaper versions of its blood pressure drug K-Dur off the market through patent settlements with generic competitors.

Months later, another federal appeals court upheld a lower court decision throwing out a similar case involving AstraZeneca Plc's cancer drug Tamoxifen.

The FTC has petitioned the U.S. Supreme Court to review the Schering-Plough decision. The court has not yet decided if it will review the case.

The FTC has monitored drug patent settlements closely since 2004, when Congress passed a law requiring drug companies to notify the FTC about them in advance.

In the report issued on Monday, the FTC found that in fiscal 2005, three of 16 drug patent settlements included payments to the generic drug and restrictions on when it would become available, according to the FTC report.

It was the first time since 1999 that drug companies entered in such agreements, the FTC said.

During the past six months, Leibowitz said, at least seven of the 10 settlements reported to the agency included those kinds of provisions.