FTC Takes Aim At Pharmaceutical Company’s Pay-For-Delay Scheme [infographic]

Consumers in Nevada may be harmed when pharmaceutical companies engage in pay-for-delay schemes, and as a result, the Federal Trade Commission is acting to end the practice, which blocks patient access to cheaper generics of name-brand medications.

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infographic_FTC and Pharmaceutical Company's Pay for Delay Scheme

Pay-for-delay settlements violate antitrust laws, and pharmaceutical companies that engage in these schemes may face substantial fines and penalties. As a consumer rights attorney in Nevada, Matthew Sharp believes that patients should have access to the medications they need at affordable prices.

What Are Pay-For-Delay Schemes?

Pay-for-delay schemes occur when patent-owning pharmaceutical companies pay large sums of money to generic drug manufacturers in exchange for the generic companies’ agreement not to publicly offer generic versions of the branded drugs. This results in limited availability of generic versions to compete with branded drugs for years. The FTC reports that the practice costs consumers an estimated $3.5 billion in extra drug costs every year and aims to end the practice by suing pharmaceutical companies under anti-trust laws because the practice is anti-competitive.

FTC Actions Against Endo Pharmaceuticals

The Federal Trade Commission recently reached a settlement with Endo Pharmaceuticals for its pay-for-delay schemes involving two of its branded drugs. Endo Pharmaceuticals agreed to end its anti-competitive schemes for two of its top drugs, Opana ER and Lidoderm. Opana ER is a pain medication, and Lidoderm is a topical patch worn by patients suffering from shingles outbreaks. The company’s $112 million payment to Impax in exchange for an agreement not to market a generic version of Opana ER of demonstrates how lucrative a monopoly of a pharmaceutical branded drugs can be. The settlement ends Endo Pharmaceutical’s anti-competitive pay-for-delay practices. The FTC also filed lawsuits against two generic pharmaceutical manufacturers, Watson Laboratories and its prior parent company, Allergan PLC, for their actions in taking settlements from Endo Pharmaceuticals in lieu of offering their generic brand drugs of Lidoderm to consumers.

Pharmaceutical companies have drawn criticism in the news the past year for drastically raising the price of branded drugs while simultaneously stifling competition from generic drug makers. This includes the makers of the EpiPen and Daraprim, drugs intended to treat severe allergic attacks and toxoplasmosis, respectively. In the case of Daraprim, the drug’s price was ratcheted up by 5,000 percent when Turing Pharmaceuticals purchased the rights to the drug, igniting the attention of the public and Congress. A consumer rights attorney in Nevada believes that anti-competitive schemes have no place in the pharmaceuticals market because they harm consumers. Contact consumer rights attorney Matthew Sharp at 775.324.1500.