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Justinian Lane

What side will the “reform” advocates take?

"Reform" advocates often claim that trial lawyers and the lawsuits they file prevent many people from getting access to needed medicines.  Supposedly, the threat of product liability lawsuits is so scary that pharmaceuticals aren't releasing perfectly safe drugs.  To hear them tell it, "reformers" are actually consumer advocates, working to ensure more people have access to better medications. 

If increasing access to medications is one of their goals, I would hope that "reform" advocates will work to end the practice of "reverse payments" or "reverse settlements" in the pharmaceutical industry.  Reverse payments allow large pharmaceuticals to pay their competitors not to bring generic drugs to market.  Here are some relevant articles about the practice:

"To qualify for the program [The program that simplifies the approval process for generic drugs. - Justinian], however, the generic lab must show that the original drug's patent is either expired or invalid. When generic labs opting for the latter route -- known as "Paragraph IV certification," after the section of the application attesting to the patent's invalidity -- file their ANDA, they automatically create a patent-infringement cause of action against them by the pioneer drug company. In return for imposing the burden of litigating that patent's validity on a generic manufacturer, the Hatch-Waxman Act rewards it with a 180-day exclusivity period so that it can get a jump on other generic labs if the patent is declared invalid.

If the pioneer company is insecure about the validity of its patent, it may simply choose to reach a "reverse settlement" with the generic entrant -- i.e., it pays the generic manufacturer to drop the case and agree not to bring the generic version to market. An arrangement of this sort between pharmaceutical giant Zeneca and generic manufacturer Barr Laboratories is at the heart of a case up for consideration on Friday by the Court, Joblove v. Barr Labs (No. 06-830). At issue is the patent for tamoxifen, a drug used to treat breast cancer that has become the most widely used cancer drug in the world." (Emphasis in original.)

Source: Philip Brooks' Patent Infringement Updates: Reverse Payments

"AstraZeneca paid Barr $56.9 million to delay its generic version of the breast-cancer drug Tamoxifen, and supplied Barr with Tamoxifen for resale in the US under a royalty arrangement."

Source: Pharmalot: DOJ To FTC: Reverse Payments Are OK

Conveniently, Philip Brooks already emphasized a very important part of his article.  The Hatch-Waxman encourages generic drug manufacturers to bring patent challenges, because if the challenge is successful, the generic manufacturer is rewarded with a six-month period of time in which it will be the only manufacturer allowed to market the generic drug in question.  This is a strong incentive for generic manufacturers to bring patent challenges - which is good for consumers as it leads to cheaper generic drugs.  But it is unquestionably bad for consumers when pharmaceuticals are allowed to bribe generic manufacturers to keep their factories idle.

It will be interesting to see how the Supeme Court resolves the Barr Laboratories case.  Even if the Court continues to allow these bribes, the practice still may be doomed:

"The Senate Judiciary Committee today passed a bill that takes aim at the growing problem of brand-name drug manufacturers using pay-off agreements to delay the public’s access to generic medicines.  The bipartisan Preserve Access to Affordable Generics Act (S. 316) would prohibit brand-name drug companies from exploiting a loophole in the Hatch-Waxman Act to pay generic drug companies to delay entry of new generic medicines into the market." (Emphasis in original.)

Source: Philip Brooks' Patent Infringement Updates: Reverse Payments

Groups like the American Tort Reform Association are generously funded by the drug manufacturers who bribe their competitors.  Will the ATRA bite the hand that feeds it and prove they really are consumer advocates and oppose the loophole?  Or will they show their true color is green and support the "right" of their funders to deny people access to lifesaving medications?  If the latter, I would hope the ATRA will have the integrity not to accuse trial lawyers of denying consumers access to the medications the ATRA's funders are spending millions to keep off the market.

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Posted at 4:26 PM, Apr 25, 2007 in Health Care
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