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Drug Companies Are Paying Millions to Delay The Release of Generic Drugs

Posted on June 8, 2016

Using a practice that reeks of an antitrust violation, pharmaceutical manufacturers are keeping generic medications out of the marketplace—at the consumer’s expense. The practice is referred to as “reverse settlement payments,” or “pay-to-delay” deals. It is basically one pharmaceutical company bribing another pharmaceutical company not to produce or to delay the production of a generic medication that they have a patent on.

For example, in a recent case where the Federal Trade Commission did crack down on reverse settlement payments, drug manufacturer Cephalon was accused of paying four generic drug manufacturers $300 million to delay introducing generic—and very much cheaper—versions of its popular narcolepsy drug Provigil. What this practice does is basically give the original manufacturer of a medication a monopoly on it, and allow it to raise prices at will because it has no competition.

The pharmaceutical corporations justify this practice because of the market share they stand to lose once their patent runs out. For instance, Endo’s Lidoderm sales totaled $947.7 million in 2012. But, when a generic version was released into the market place in 2013, Endo’s sales of the drug dropped to just $125.3 million.

It’s a practice where both the brand name and the generic drug makers win and the consumer loses. The Federal Trade Commission estimates that these inside deals between drug companies cost consumers $3.5 billion every year.

Contact a Dedicated Pharmaceutical Litigation Attorney

If you feel you may have a legal claim of any kind, contact the legal team at the law offices of Farah & Farah to find out what legal options are available to you. We are currently investigating injury claims related to dangerous medications nationwide. The pharmaceutical drug injury attorneys of Farah & Farah can be reached day or night. Call (800) 533-3555 for a free, no obligation, confidential case evaluation.