Big Pharma is at it again. Last week, we saw the latest chapter of Big Pharma’s ongoing War on Generics as a big drugmaker reached settlements with three generic drug manufacturers that will delay the entry of generic versions of heart disease drug Vyndamax – with a list price of over $225,000 per year – until mid-2031.
“Pay for Delay” is one of several tactics in their arsenal that drug companies use to block generics.
Others include “Patent Thickets” … “Product Hopping” … “Evergreening.”
These schemes allow big drugmakers to extend their monopolies on drugs beyond what the law allows, all so they can keep charging sky-high prices because there is no competition.
Pay-for-delay settlements increase prescription drug costs by nearly $12 billion per year, according to a recent study. Of that, more than $3 billion per year comes directly from patients in the form of higher out-of-pocket costs.
Here’s how it works:
In the Vyndamax example above, generic competition would have begun around 2029 but due to the pay-for-delay settlements, the agreements now push lower-cost alternatives back by almost three years.
And there are plenty of other examples of this tactic in action…
- Novartis reached an agreement with a generic manufacturer requiring delayed entry of hypertension drug Exforge for nearly two years.
- AbbVie (through Forest Laboratories) protected Alzheimer’s disease drug Namenda from competition through a pay-for-delay agreement, forcing them to settle a class action lawsuit from health plans.
- AstraZeneca agreed to settle pay-for-delay claims related to schizophrenia drug Seroquel XR, where an agreement with a generic manufacturer delayed competition for several years and kept prices high.
The Federal Trade Commission (FTC) recently called out the tactic, saying:
“These drug makers have been able to sidestep competition by offering patent settlements that pay generic companies not to bring lower-cost alternatives to market. These “pay-for-delay” patent settlements effectively block all other generic drug competition for a growing number of branded drugs.”
Patent abuse tactics like pay-for-delay allow big drugmakers to block lower-cost alternatives from reaching patients, and boost their own profits, even after a drug should face competition.
It’s all part of Big Pharma’s War on Generics and patients are paying for it.