SCREWED AGAIN

Corporate America/big business has no reluctance to do whatever is necessary to enlarge its bottom line. To profit as much and as long as possible. Even to the detriment of the American people.

 

An example in point involves pharmaceutical companies. Big money! Any one who purchases prescription drugs on a regular basis knows. Expensive!

 

A company discovers/creates a new drug. A twenty year patent kicks in. Which means simply that no other company can produce that drug till the end of the twenty year period. At that time a cheaper but same drug can be sold under a another name. The duplicated drug is known as a generic. As contrasted with the company that discovers/creates the drug which is known as the brand company.

 

Brand companies get paid exorbitant prices for their drugs. The reason claimed is that it takes years of research and development. The originator of the drug should be adequately compensated. Whereas a generic company has no research and development time involved. It merely produces the same drug under a different name. Thereby enabling the generic to be sold at a considerably lower price. The difference between the brand drug and generic generally being 80-85 per cent.

 

A business arrangement has developed between the brand and generic companies. An arrangement that works to the detriment of the purchasing public.

 

Generic companies have the right to challenge the legality of a patent.They do so. If the generic wins, that means the generic can start producing a particular drug immediately.

 

The brand companies do not wish such to occur. It would cut into the gigantic profit the brand company is making. A custom has developed where the brand and generic companies sit down after litigation has occurred where the generic has won. They negotiate a deal. The brand company will pay x number of dollars in a lump sum to the generic company not to begin production of the generic drug for a specified number of years.

 

Both sides make out.

 

The brand company makes so much money, it can afford to throw a few million the generic's way. The generic receives a windfall up front. More money than it could make if it went out and sold the generic drug.

 

This works out well for both sides. It does not work out well for the third party involved. The purchasers of the drug. The purchasers keep paying big dollars for a particular drug when it could and should be paying less. Were it not for the agreement which the brand company and generic company entered into.

 

This may soon come to an end.

 

The Federal Trade Commission has the right to test the legality of such settlements. They decided to do so with regard to a particular prescription medicine. The case was heard recently before the United States Supreme Court. The issue was whether such deals as described are legal.

 

Involved is Ando Gel. An erectile dysfunction remedy. It requires a man to spray the medication on his chest once a day. In due course, erect ability is supposed to return. Apparently it does. Sales are $400 million a year.

 

$400 million breaks down to a cost to the individual consumer of $250-300 per month, if there is no insurance. If there is insurance for the brand product, the cost to the consumer is $20-40 per month. If the product was generic and insurance available, the cost to the consumer a mere $5-10 per month.

 

Andro Gel's patent was attacked by a generic firm. The generic won. Andro Gel made a deal to pay the generic company $42 million a year for 9 years if it did not exercise its right to produce Andro Gel under another name. The $42 million a year for 9 years is substantially more than the generic company could have earned if it was actually selling the generic.

 

A good deal for Andro Gel. Its yearly profit would be $400 million, less $42 million a year. Still a tidy sum.

 

For whatever reason, the Federal Trade Commission decided to test the waters. The commission took the position such an arrangement was illegal. The case was recently heard by the United States Supreme Court. A decision will be rendered in due course.

 

I have no idea who will win. I am excited however that the issue is before the Supreme Court. Chicanery of this nature is to be attacked when ever and where ever it occurs. Transparency is required. Get everything on the table for all to see and understand. The big guys have to cease screwing the American public.