No pain relief for drug-makers in Supreme Court ruling

It isn’t a prescription to cure high drug prices, but it may be a start.

The U.S. Supreme Court has given the Federal Trade Commission the authority to challenge deals between drugmakers to keep generic drugs off the market for certain time periods. Those deals allow brand-name manufacturers to make more money as their patents expire, but the FTC has said these “pay for delay” arrangements cost people who use the drugs $3.5 billion a year.

Leigh Purvis, senior strategic policy adviser for the AARP Public Policy Institute, said it’s one of many ways drug companies shore up their profits.

“We do just take a lot of what the drug industry does as, ‘Yeah, this is just the cost of doing business,’ and it isn’t necessarily illegal, but it also isn’t something that necessarily has to happen,” Purvis said. “So, you kind of have to get into the mindset that maybe we could try to stop some of this behavior.”

AARP filed a brief in the Supreme Court case supporting the FTC’s position. The high court ruling doesn’t mean pay-for-delay deals are illegal – only that they’ll now be subject to more scrutiny.

Generic drug companies like the pay-for-delay strategy because it minimizes their risk of being sued if they infringe on an expiring patent. Purvis said AARP views it through the eyes of those who have to pay more for the medications they need.

“From AARP’s perspective, we would really like to see pay-for-delay deals go away,” Purvis said. “I think also people need to be wise consumers of their prescription drugs. It really does benefit people to take a look at what they’re taking and maybe talk to their prescriber to see if there’s a less expensive option available.”

Last week, AARP’s Public Policy Institute released a case study on pricing of the popular cholesterol drug Lipitor. In the five years before Lipitor’s patent expired in 2011, the study said, its price contined to climb. Purvis, the report author, called drug-maker Pfizer’s approach “unusually aggressive.”

“The price increases that were taking place occurred while they were officially or supposedly under a pay-for-delay deal,” Purvis said, “which means not only were they holding a generic effectively off the market, but they were also increasing their prices at, say, 17.5 percent in a year, which is just kind of adding insult to injury.”

In addition to citing pay-for-delay agreements, the report alleged that rebates were offered to insurance companies to reject claims for generic equivalents and prompt more Lipitor prescriptions. Pfizer said it also offered discounts to consumers.