Patt Morrison for June 8, 2011

Why are generic (and cheap) drugs in such short supply? One dose of patent monopolies

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Interior of the last Owl Rexall Drug Store in Los Angeles.

There’s a practice that’s becoming more common among drug companies and its beginning to alarm consumer advocate groups and politicians alike. Consumers may not realize that the makers of popular pharmaceuticals strike deals with the manufacturers of generic drugs in order to keep lower cost versions of a particular drug off the pharmacy shelves. The Federal Trade Commission is wading into the battle, urging an appeals court to outlaw certain deals that are struck to delay the introduced of cheaper generic drugs. At the heart of this arrangement is a bargain that is struck to keep a generic product off the market for a year. This allows a drug manufacturer to retain its monopoly and enables the company to continue to charge the highest market value without fear of competition. The pharmaceutical companies argue that the arrangement saves billions of dollars by avoiding the frequent litigations that occur as patent-disputes arise. Is the cost to the consumer worth the pain-killer for big pharma?


David Certner, legislative policy director, American Association of Retired Persons (AARP)

Diane Bieri, General Counsel, The Pharmaceutical Research and Manufacturers of America

Bob Billings, executive director, Generic Pharmaceutical Association

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