Patent Law

Pumped for Action

By Gary Odom and Jordan Kuhn

The Nanny State of America, 21st century style, buys dross loans as a bailout for greedy but now bankrupt bankers, ostensibly to stimulate the economy, rather than cutting taxes, which really stimulates the economy. Now it wants to force companies to make drugs, when they'd rather be paid off not to. Which suspiciously sounds like farm subsidies, paying farmers not to plant crops, that the government has indulged in for decades.

An outraged Senator Herb Kohl has introduced legislation to outlaw reverse payments by patent-holding drug companies to their generic kin:

It's time to stop these drug company pay-for-delay deals that only serve the profits of the companies involved and deny consumers access to affordable generic drugs. These agreements between generic and brand name pharmaceutical manufacturers appear to simply line the pockets of the companies and leave the bill to the consumer. In a time when our federal health care programs such as Medicare and Medicaid are facing extraordinary fiscal strains, this wheeling and dealing only delays the entry of lower priced medicines in the marketplace.

This from a member of a government body best known for wheeling and dealing, and delay.

From the Herbal press release:

The legislation would make illegal anti-competitive, anti-consumer patent payoffs in which brand name drug companies pay generic manufacturers millions of dollars to keep generic competition off the market. Despite the opposition of the Federal Trade Commission to these patent settlements, two 2005 appellate court decisions have permitted these payoffs. In the two years after these two decisions, the FTC has found nearly half of all patent settlements involved payments from the brand name from the generic manufacturer in return for an agreement by the generic to keep its drug off the market. In the year prior to these decisions, however, no patent settlement reported to the FTC contained such an agreement.

The anti-patent powerhouse FTC has again taken the law into its own hands, filing suit, with California riding shotgun, against Solvay Pharmaceuticals, which makes the testosterone-replacement drug AndroGel, with a king-sized nut of domestic sales more than $400 million, according to the FTC.

The complaint waxes poetic about the benefits of cut-rate testosterone. It leaves a reader weepy about the injustice of premium-priced cod juice.

Numerous paragraphs of the complaint were redacted, no doubt to protect delicate sensibilities. Transparency in government is no concern of its citizens, the FTC reckons, which claims a monopoly of information as it sees fit.

Solvay allegedly paid Watson Pharmaceuticals and Par Pharmaceutical to delay making a generic version of the drug until 2015. The FTC claims the payments were a violation of the Sherman Antitrust Act, and Section 5(a) of the FTC Act. California lays on its own charges of unfair competition under its Cartwright Act.

Every game is rigged, and whatever the game, might makes right.

Full post as published by The Patent Prospector on February 05, 2009 (boomark / email).