HEALTH AND SAFETY

» Drug, Devices, and Supplements

» Physician Accountability

» Consumer Product Safety

» Worker Safety

» Health Care Delivery

» Auto and Truck Safety

» Global Access to Medicines

» Infant Formula Marketing

 

Health Letter Archive


How to order a print version of Health Letter

You may order back issues, which are available for $3.00 each. If you have questions about Health Letter, please call (202) 588-1000 and ask to speak with a representative from the Health Research Group.

Ordering by credit card

Call Member Services at (202) 588-1000 to order by credit card. Public Citizen accepts Visa, MasterCard, American Express and Discover. Unfortunately, it is not currently possible to order the Health Letter online.

Ordering by check

Mail a check payable to Public Citizen to:

Health Letter
1600 20th Street NW
Washington, DC 20009

Health Letter Cumulative Alphabetical Subject index

View a comprehensive list of subjects covered in Health Letter from its first issue in 1985 through the present.

Copyright © Health Letter.
All rights reserved.
Material appearing in Health Letter may not be reprinted without permission from the editor.

Read our outrages

If you're not outraged,
you're not paying attention!


Read what Public Citizen has to say about the biggest blunders and outrageous offenses in the world of public health, published monthly in Health Letter.

Pay for Delay

August 2013

Sidney M. Wolfe, M.D.

The more we learn about the lucrative scheme of “pay for delay,” in which brand-name drug companies pay generic companies to delay marketing of a drug, the more outrageous it becomes. In the scheme, generic companies profit by agreeing to delay the introduction of their lower-priced version, and brand-name companies profit by having an artificially prolonged time to maintain their market exclusivity, at much higher prices. But what is lucrative for these companies is extremely costly, even unaffordable, for patients who must pay higher prices for an extended time.

A new report by the nonprofit advocacy organizations California Public Interest Group and Community Catalyst examines the consequences for patients of 20 widely used drugs for which pay-for-delay schemes were employed. Among the drugs studied were Cipro (ciprofloxacin), Lipitor (atorvastatin) and Nexium (esomeprazole). For the 15 medications studied for which the delay is now over, the price disparity after the delay period shows the extent of savings that are unavailable while the delay period is in place. For example, a prescription for brand-name antibiotic Cipro costs $346, but generic ciprofloxacin costs only $23, and a prescription for Lipitor costs $205, while generic atorvastatin is only $18. The brand-name drugs studied cost an average of 10 times more than their generic equivalents, but as much as 33 times more, and the payouts on these drugs have delayed the introduction of generic versions for an average of five years, but for as long as nine years. Since 2005, generic versions of 142 drugs have been delayed this way.

Although many federal bills banning pay for delay have been proposed since 2006, none of them have succeeded, largely due to drug industry opposition. But a vital ray of sunshine comes via the recent Supreme Court decision in Federal Trade Commission v. Actavis. This ruling upheld the Federal Trade Commission’s right to challenge patent settlements that would result in pay-for-delay deals because of the significant anticompetitive effects these schemes can have. In this case, the payment from the brand-name company to the generic company was said to be between $19 million and $30 million annually until 2015. The decision did not flatly ban any such payment by brand-name companies, but it implied that much smaller payments might be allowed.

The decision stopped short of an outright ban but is likely to significantly reduce the size and occurrence of pay-for-delay deals and thereby hasten the time for less-expensive generic drugs to reach the millions of patients who will be much more able to afford them.

Copyright © 2014 Public Citizen. Some rights reserved. Non-commercial use of text and images in which Public Citizen holds the copyright is permitted, with attribution, under the terms and conditions of a Creative Commons License. This Web site is shared by Public Citizen Inc. and Public Citizen Foundation. Learn More about the distinction between these two components of Public Citizen.


Public Citizen, Inc. and Public Citizen Foundation

 

Together, two separate corporate entities called Public Citizen, Inc. and Public Citizen Foundation, Inc., form Public Citizen. Both entities are part of the same overall organization, and this Web site refers to the two organizations collectively as Public Citizen.

Although the work of the two components overlaps, some activities are done by one component and not the other. The primary distinction is with respect to lobbying activity. Public Citizen, Inc., an IRS § 501(c)(4) entity, lobbies Congress to advance Public Citizen’s mission of protecting public health and safety, advancing government transparency, and urging corporate accountability. Public Citizen Foundation, however, is an IRS § 501(c)(3) organization. Accordingly, its ability to engage in lobbying is limited by federal law, but it may receive donations that are tax-deductible by the contributor. Public Citizen Inc. does most of the lobbying activity discussed on the Public Citizen Web site. Public Citizen Foundation performs most of the litigation and education activities discussed on the Web site.

You may make a contribution to Public Citizen, Inc., Public Citizen Foundation, or both. Contributions to both organizations are used to support our public interest work. However, each Public Citizen component will use only the funds contributed directly to it to carry out the activities it conducts as part of Public Citizen’s mission. Only gifts to the Foundation are tax-deductible. Individuals who want to join Public Citizen should make a contribution to Public Citizen, Inc., which will not be tax deductible.

 

To become a member of Public Citizen, click here.
To become a member and make an additional tax-deductible donation to Public Citizen Foundation, click here.