The US Supreme Court has decided to take up a case over whether pharmaceutical companies can pay makers of generic drugs to delay release of out of patent drugs.
The case centers on the maker of a hormonal treatment called Androgel by Solvay, which is owned by US drug maker Abott.
Documents filed in the case say Solvay paid as much as $42 million a year to three manufacturers of generic drugs — Par, Watson and Paddock — for them to delay until 2015 release of a generic version of Androgel.
The Federal Trade Commission contends the price of the drug would have gone down by 75-85 percent if the generic version had been released earlier, costing Solvay $125 million.
The practice is known as “pay for delay” and is used by the most powerful drug makers to extend the profitability of out of patent drugs. It is believed to cost US consumers $3.5 billion a year, the FTC said.
It called the practice “unfair methods of competition,” and said Solvay “unlawfully extended its monopoly on Androgel®, not on the basis of its patent, but by compensating its potential competitors.”
FTC chair Jon Leibowitz back in 2009 spoke of the arrangement as “win-win deals for both companies. But (they) leave American consumers footing the bill.”
Solvay maintains the practice is legal and a compensation for its investments in research and patents.
The Supreme Court is expected to address whether the practice is legal or if it is unfair and anticompetitive.