Archive for the ‘Attorney General’ Category
Tuesday, June 5th, 2012
[Also posted on Postscript]
When drugmakers lie to doctors about a drug’s safety or effectiveness, health plans pay more for substandard care, and patients suffer.
Case in point — the recent guilty plea and $1.5 billion settlement for illegal promotion of the drug Depakote revealed how Abbott Labs misled doctors for nearly a decade. They went to great lengths, profiling doctors, training their salespeople, and inappropriately funding and influencing Continuing Medical Education to get doctors to prescribe Depakote for unapproved treatment of seniors with dementia. Why? Because such off-label promotion instantly expands a drug’s market, and thus the drugmaker’s potential profits.
Unfortunately, class action lawsuits on behalf of consumers and health plans challenging such illegal marketing have met significant legal hurdles, and have been dismissed. This leaves consumers and private market health plans paying billions because of this fraud, while millions of patients receive inappropriate treatment, and are unnecessarily put at risk of side effects, which are often serious.
But progress is being made by State Attorneys-General and the Department of Justice bringing legal challenges under false claim laws. As a result, six of the biggest drugmakers have admitted or pled guilty to illegal promotion of unapproved uses of drugs since 2004. These investigations, most often initiated by whistleblowers, have led to the largest fines in U.S. history, and billions will be recovered this year alone.
But while all these enforcement actions are a welcome development, a recent jury verdict in a trial by the State of Arkansas may become a game-changer in the fight to stop the illegal marketing or promotion of drug products.
This past April, Arkansas Attorney-General Dustin McDaniel won a staggering verdict against Johnson & Johnson for their illegal promotion of the off-label uses of the antipsychotic drug Risperdal. In a trial before a jury, the state won $1.19 billion (yes, that’s ‘b’ ) in fines for violations of the state Medicaid anti-fraud law.
A hefty billion-dollar fine like this from one state sends a very big message — drug companies can no longer pursue profits by scoffing at the laws designed to protect safety-net health plans and the patients they serve.
Even more encouraging is the fact that most of the $1.19 billion in fines will go to the State Medicaid fund, which is looking at a $400 million budget shortfall next year.
What could be better than a deterrent that also helps stabilize funding for a state’s Medicaid plan during these tough economic times? Well, the only thing that could make this victory even better would be for Arkansas’ Medicaid program to earmark some of these recovered funds to correct the misinformation spread by Johnson & Johnson. Setting aside even a small amount of funds to allow trained independent medical professionals to go out into the field and teach doctors about the appropriate and effective alternatives to the unapproved uses of Risperdal will help prevent any ongoing inappropriate use of Risperdal, improving the quality of patient care and protect patients from being harmed by the significant side effects of the drug, like weight gain and diabetes. (See more about such education programs here.)
As we have seen in drug pricing (here and here) and universal coverage, the States often take the lead in on innovative ways to protect consumers. Based on this successful prosecution by the Arkansas Attorney-General, it wouldn’t be a bad idea for the remaining States to beef up their anti-fraud laws and enforcement staff, and go after the drug industry.
– Wells Wilkinson
Director, Prescription Access Litigation
Staff Attorney, Community Catalyst
Tuesday, June 5th, 2012
[Also posted on Postscript]
The guilty plea and $1.5 billion settlement by Abbott to resolve their illegal off-label promotion of Depakote revealed a saga of extensive industry abuses and influence peddling that put millions of vulnerable seniors at risk. Abbott’s extensive promotion of the unapproved uses of the anti-convulsant drug Depakote to treat both seniors with dementia and to treat children is shocking. But it is even more alarming that this not the first major drugmaker to plead guilty to illegal marketing tactics that have targeted this exceptionally vulnerable population of seniors.
Many may recall that Eli Lilly was caught illegally promoting the unapproved, or “off-label” use of the antipsychotic drug Zyprexa to treat seniors with dementia, despite their internal studies showing that the risk of death from this drug increased in elderly patients.
Marketing these drugs to nursing homes for use on patients who ‘act up’ or are unruly has been a lucrative strategy for drugmakers. In response, we applaud the Department of Justice and the State Attorneys-General for their increasingly aggressive litigation to penalize these dangerous and unconscionable marketing practices.
But unfortunately for the millions of seniors who may be given Depakote or Zyprexa today or in the near future, the record-breaking $1.4 and $1.5 billion settlements respectively may not translate into improved care, unless further action is taken.
We urge Medicare and Medicaid officials at the federal and state level to move quickly to develop and implement safeguards, such as prior approvals or mandatory second opinions, that could be put in place to protect these vulnerable seniors from any unwarranted or inappropriate use of the drug Depakote to treat their dementia.
Looking forward, it’s time that all off-label settlements by the DOJ or the states include a requirement that the drugmaker pay to correct the misinformation that off-label marketing creates – i.e. that a drug is safer or more effective than it really is. Using lawsuits to fund corrective educational campaigns has a long history, both in public and private sector litigation. (See description here.)
To help stop the inappropriate and potentially harmful overuse of Depakote, Zyprexa, or Risperdal from continuing, doctors should be retrained to undo the misinformation campaigns by Abbott, Eli Lilly, and Johnson and Johnson. Several states, including Pennsylvania and New York have implemented “academic detailing” programs that send independent medical experts, usually nurse practitioners and pharmacists, to provide doctors with the truth about how effective drugs are from an objective, evidence-based perspective. Many state programs specifically address mental health drugs such as Zyprexa and Depakote. Indeed, one of the first of these education programs designed by Dr. Jerry Avorn, who spearheaded the concept in the 1990’s, recommended that a little tender loving care by nursing home staff could reduce the inappropriate use of sedatives, common at that time. A similar conclusion was reached by some nursing homes profiled in an inspiring Boston Globe article addressing the overuse of Depakote.
– Wells Wilkinson,
Director, Prescription Access Litigation
Staff Attorney, Community Catalyst
Tuesday, May 29th, 2012
Posted May 29th, 2012
The Affordable Care Act created some desperately needed means to start controlling ever-rising health care costs. Many — like preventive care or delivery reforms — will take some time to realize savings. In contrast, new anti-fraud efforts look to be paying off right away, in amounts much bigger than expected.
The health reform law provided $350 million over ten years to increase anti-fraud investigation and enforcement resources for the Department of Justice (DOJ) and State Attorneys-General. The goal? Saving $6.4 billion over the next decade. Given that some estimate that fraud and waste cost as much as $60 billion a year, or $600 billion over a decade, saving one percent of that amount seems a pretty modest impact.
But wait! New estimates project that current or pending settlements of drug fraud litigation by the DOJ and the Attorneys-General will top $8 billion in FY2012 alone, according to the group Taxpayers Against Fraud. (See list below.) This is not the culmination of hundreds of lawsuits; it’s just the eight biggest. So it looks like this anti-fraud effort under the ACA will meet and then surpass its ten-year goal in less than two years!
To be fair, most of these eight drug fraud investigations were undoubtedly underway before the increased funding for anti-fraud efforts reached the DOJ and State Attorneys-General offices. But there is little doubt that providing these over-worked regulators with increased resources was a big help in increasing enforcement. DOJ probably has fewer lawyers working on all their pending drug fraud cases than some of the biggest drugmakers hire to defend a single lawsuit. But despite these disparities, these results show that very modest government investment in fighting fraud, coupled with hard work by government lawyers and whistleblowers, can pay off big.
For example, earlier this week drugmaker Abbott Labs in Chicago settled a civil and criminal investigation of their illegal promotion of the anti-convulsant drug Depakote as an unapproved treatment of dementia in seniors, and of various conditions in children. Abbott pleaded guilty to promoting these unapproved, or ‘off-label’ uses of Depakote, and agreed to pay $1.6 billion – one of the biggest settlements for the illegal promotion of a single drug.
There could be as many as a couple hundred pending whistle-blower lawsuits that are filed under seal and being investigated now by the federal or state regulators. These pending lawsuits may add up to billions of dollars of additional fines and settlements.
Some critics have warned that even billion-dollar fines are an inadequate deterrent when a drug company can make far in profits on illegally promoted sales of a drug.
For instance, the $1.4 billion record-breaking settlement with Eli Lilly in 2009 for illegal promotion of their antipsychotic drug Zeprexa was less than 5 percent of Lilly’s gross sales. Eight months later, DOJ shattered this record with an even bigger $2.3 billion settlement, which amounted to 14 percent of Pfizer’s gross sales of eight illegally marketed drugs (see here).
Similarly, this month’s $1.6 billion Depakote settlement is nearly 12 percent of the drug’s $13.8 billion in gross sales revenue from 1998 to 2008. Furthermore, DOJ is pioneering two mechanisms to deter future illegal conduct by Abbott, along with this hefty fine.
First, the Depakote settlement places Abbott on probation and imposes a corporate compliance and monitoring program, for five years. If Abbott violates the compliance agreement or significantly violates the law, the government can exclude Abbott, and all their drug products, from federal health care programs. That would cost Abbott billions in lost sales on numerous drugs.
The settlement also aims to hold Abbott’s corporate leadership personally accountable. Abbott’s CEO must personally certify compliance and the board of directors must review and report on compliance each year. If the CEO or the board is lax in these duties, they could be excluded from their positions at Abbott. And if CEO or board intentionally lie to the government to cover up any misconduct, they could face personal criminal liability under the federal False Statements Statute. (Find the plea agreement and related documents here.)
Sadly, Abbott’s illegal promotion of ineffective and dangerous uses of Depakote has both harmed and put at risk what is arguably the most vulnerable patient population – seniors suffering from dementia, who live away from their families in nursing homes. Undoubtedly millions of seniors were, and likely continue to be given Depakote inappropriately as a result of Abbott’s illegal promotional campaign.
Check back soon for more on (1) actions that Medicare and Medicaid can take to address the continuing effects on patients of illegal promotions of off-label use of drugs and (2) how the Arkansas AG fought prescription drug fraud, winning huge fines to plug the state’s Medicaid budget deficit.
Director, Prescription Access Litigation
Staff Attorney, Community Catalyst
Projected Drug Fraud Settlements in FY 2012, excerpted from the Taxpayers Against Fraud website.
||Off-label marketing of Vioxx — settled
||Series of drug frauds, said to be settled in principle.
||Off-label marketing of Depakote, settled.
||Illegal marketing of Aranesp, funds reserved.
||Illegal marketing of protonix, projected settlement amount.
|Johnson & Johnson
||Off-label marketing of Risperdal, civil settlement is expected.
||Adulteration of HIV drugs, settlement in excess of $400 million expected.
||AWP pricing fraud, settled.
A version of this blog was posted earlier on Health Policy Hub and Postscript.
Wednesday, September 8th, 2010
Second Circuit takes a pass on reviewing the legality of pay-for-delay settlements
A negative court decision before the Second Circuit this week underscores the importance of passing federal legislation to ban ‘pay-for-delay’ settlements in order to preserve access to affordable, quality prescription drug benefits. At issue is the drug industry practice of paying off generic competitors of expensive brand-name drugs to delay access to low-cost generics. See our earlier blogs here and here.
On Tuesday, the Second Circuit issued a decision on the legality of pay-for-delay settlements concerning the drug Cipro that dealt a blow to consumer advocates and consumer protection attorneys challenging these collusive agreements in court. The decision rebuffed the Federal Trade Commission, the Department of Justice, and a group of State Attorneys-General, all of whom asked the Court to re-evaluate an earlier precedent from 2005 that allowed such ‘pay-for-delay’ settlements.
While the attorneys ponder whether to appeal the case to the Supreme Court, the importance of a legislative solution to this problem becomes even more clear.
Current legislation before the U.S. Senate proposed by Senators Herb Kohl (D-WI) and Richard Durbin (D-IL) would create a presumption that any drug patent settlement that exchanges a payment in return for an agreement to delay bringing a generic to the market is a violation of anti-trust law. The bill gives the FTC the tools to challenge such settlements. However, it still allows the drug companies to prove that a settlement is not a collusive agreement, but a legitimate effort to avoid the time and costs of litigation.
Why is a ban on pay-for-delay settlements important? Since 2005, Congress has responded to concerns about potential collusion by requiring the drug industry to file any settlement of patent litigation concerning a generic drug under seal with the FTC. Since 2004, the FTC has reviewed these settlements, and found that an increasing number of ‘pay-for-delay’ sweetheart deals have been made since the courts started to allow them in 2005. Last fiscal year, a record 19 such pay-for-delay deals were made. By the nine month mark of this fiscal year on June 30, the record was broken, with 21 new pay-for-delay settlements.
These settlements have prevented billions of dollars in possible savings, by preventing generic drugs from being available. At a time when consumer advocacy groups like AARP are documenting exhorbitant price increases for brand-name drugs, generic drugs are the best solution. Another recent report found that every 2% increase in generic use saves Medicaid $1 billion a year.
The FTC, which reviews these agreements, reported in January 2010 that $20 billion dollars in annual brand-name drug spending was being insulated from generic competition by pay-for-delay sweetheart deals. Then, in July, the FTC reported that new pay-for-delay deals were shielding another $9 billion in drug spending from market competition.
How does this impact consumers? The FTC reports that pay-for-delay settlements keep a generic drug off the market for an average of 17 months. The FTC estimates that being forced to take a brand-name drug costing $300 per month, instead of a generic costing $30, would increase a consumer’s health cost by $4,590 over that 17-month period. Drugs that cost more, or that have longer delays, will cost even more.
If a robust, competitive market is to play a role in our new health care system, shielding nearly ten percent of all annual brand-name drug sales from market competition will only allow drug company price increases to continue depleting more and more of our health care resources, while putting more patient care at risk.
In a brief filed with the court, the AMA and AARP described having access to a generic drug improves the quality of patient care:
The price of a brand drug can be prohibitive for uninsured patients who do not have help covering the cost of their prescription drugs. Even for those patients who are insured but who are on fixed or limited incomes, having a generic option is often the difference between having access to a health care treatment and not having any treatment option at all.
And the lawsuit filed by PAL member AFSCME District Council 37in 2006 is challenging the pay-for-delay settlements concerning the drug Provigil, used to treat narcolepsy. This lawsuit has revealed how the lack of competition reduces patients’ quality of life or quality of care when an insurance company refuses to pay for a high-cost brand-name drug. A pastor from Ohio reports that after
paying almost $17,000 in annual premiums for my family [health insurance plan, l] ast year, I was paying around $650/month [for Provigil. I]t now costs me $852/month. That is out of pocket money I have to come up with until later in the year when I reach my deductable and I can enjoy a few months of only paying $60/month. I cannot describe to you how much stress and difficulty this has caused for me and my family the last several years. As you can imagine, with my income, I often cannot afford to refill my prescription. I often take 1/2 or 3/4 of my dosage on days I know I won’t be driving much so I can delay getting a refill. But I do a lot of driving for my work, so I am forced to spend lots of money I don’t have just so I can be safe driving.
To find out how you can support legislation to prevent these pay-for-delay settlements, please contact us!
Monday, November 3rd, 2008
Numerous state Attorneys General have filed lawsuits against pharmaceutical companies for allegedly fraudulently inflating the “Average Wholesale Price” of prescription drugs that states pay for on behalf of Medicaid recipients. The “Average Wholesale Price” (AWP) is a benchmark that drug companies report to drug pricing publishers like First Databank, Inc. State Medicaid programs and private health plans use the AWP to determine how much to pay pharmacies for drugs. When a drug company inflates its products’ AWPs, states end up overpaying pharmacies for drugs dispensed to their Medicaid recipients, state employees and others.
More than 20 states’ Attorneys General have filed suit lawsuits, and there have been a number of settlements. The latest was announced on Friday, settling a suit that Missouri Attorney General Jay Nixon brought against Schering-Plough Corp. (NYSE:SGP), Warrick Pharmaceuticals, and Schering Corp. (the latter two are subsidiaries of Schering-Plough). Schering-Plough agreed to pay $31 million after a jury decided on Thursday October 30 to award $7.3 in compensatory damages. The jury had not yet made a decision on whether to award punitive damages, which can often be quite higher. Schering originally announced their intention to appeal the Jury’s $7.3M award, but then on Friday announced that they decided to settle the case.
See the St. Louis Post-Dispatch article on the settlement.
Interestingly, back in August, the Post-Dispatch ran a somewhat amusing article reporting that the jury that was originally selected for the trial had to be dismissed after jurors began moaning and groaning about having been selected (“Jurors’ moans prompt judge to dismiss panel in lawsuit” [no current link available]), which said:
The excuses usually begin before the jury is selected.
But on Tuesday, jurors stepped forward to complain after they were selected for a closely watched Medicaid fraud trial.
The judge then delayed the lawsuit trial, which had already consumed a good deal of time and expense for several lawyers for Missouri and the pharmaceutical companies the state is suing.
After the jury was selected, some jurors indicated their reluctance to serve to Circuit Judge David L. Dowd, who had told them the trial might last two weeks. Other jurors just moaned as they moved towards the jury box and prepared to take an oath. Dowd then asked the jurors what was the matter. He then asked attorneys for a private conference. Both sides agreed that the trial — which had been set on the calendar 18 months ago — could not proceed with this panel.
In April 2006, Missouri settled another AWP fraud case, with Dey Pharmaceuticals, for $2.9M.
In February 2008, a jury ordered Astra Zeneca to pay the state of Alabama $40 million in compensatory damages and $175 million in punitive damages for inflating AWPs. The Judge later reduced the punitive damages to $120 million.
Several members of Prescription Access Litigation’s coalition are plaintiffs in a massive national class action lawsuit that alleges that drug companies inflated the AWPs of injectable and other physician-administered drugs covered by Medicare Part B. There have been several settlements in that case:
- GlaxoSmithKline: $70 million to settle all claims. Settlement info here.
- Astra Zeneca: $24 million to settle claims of Medicare beneficiaries. Settlement info here.
- Eleven drug companies: $125 million to settle all claims. Settlement info here.
Tuesday, September 18th, 2007
The Attorney General of New York state and Mayor of New York City issued this announcement yesterday, of a lawsuit against Merck (NYSE:MRK):
Attorney General Andrew M. Cuomo and New York City Mayor Michael Bloomberg today filed a joint lawsuit against the maker of Vioxx for misrepresenting the dangers the drug posed to its users. The lawsuit seeks damages and civil penalties in addition to restitution for tens of millions of taxpayer dollars wrongfully spent on Vioxx prescriptions, and marks the first time the State and City have brought a joint action to fight Medicaid fraud.
One question concerns what New York is seeking restitution for:
As a result, Merck is accused of having caused New York doctors to prescribe Vioxx to patients whose cardiovascular conditions made them especially susceptible to the drug’s negative effects. Had the doctors been adequately informed, the suit alleges, they would not have prescribed Vioxx and thus Medicaid and EPIC would not have paid for its dispensation.
The group of “patients whose cardiovascular conditions made them especially susceptible to the drug’s negative effects” is but a small subset of the patients for whom Vioxx was improperly prescribed. With Vioxx, Merck’s deception caused the entire health care system to pay for prescriptions not only for people who were at risk of heart attacks and thus shouldn’t have taken Vioxx, but also for people who wouldn’t have taken it had they known the risks (regardless of whether they were individually at higher risk) and also for people who simply didn’t need it — that is, the vast majority, for whom over-the-counter Ibuprofen or Naproxen Sodium would have worked just as well.
The press release makes it seem that NY is only seeking to recoup the payments it made for patients who were “especially susceptible” to the side effects. How will New York determine which patients those are? And why are they not seeking to recoup the payments made for the much larger groups of patients who were prescribed Vioxx unnecessarily? The deception allegedly undertaken by Merck was not just about the side effects — but also about the efficacy: Merck made Vioxx seem like a vast improvement over other drugs, when for pain relief it was no better than ibuprofen.
The main question that springs to mind is “What took them so long?” Vioxx was withdrawn from the market at the end of 2004. Here it is, nearly three years later. The filing of this lawsuit comes on the heels of the recent decision of the New Jersey Supreme Court, refusing to allow a class action on behalf of “third party payors” (TPPs) to go forward. Third Party Payors are those entities that pay for drugs and medical care on behalf of individuals — i.e. health plans, union benefit funds, self-insured employers. Government programs like state Medicaid programs are also third party payors, but are almost always excluded from these class actions because only state Attorneys General can bring lawsuits on behalf of their states.
In all likelihood, the timing of this new lawsuit, so soon after the New Jersey Supreme Court Vioxx decision, is coincidental. But it does make one consider the patchwork system in which the different players in the health care system try to get restitution when a drug company rips them off.
When a consumer goes to the pharmacy counter, numerous different entities may pick up part or all of the tab:
- The consumer him or herself (either out of pocket entirely, or a fixed copayment or a percentage co-insurance)
- A private health plan, perhaps through an employer or union, or purchased individually, or a Medicare supplemental plan, or a Medicare drug plan
- A state government program, such as Medicaid, an AIDS Drug Assistance Program, a state program for seniors, or a state employee health plan
- A federal government program, suchs as the VA, Tri-Care (the military health plan), a federal employees health plan, or Medicare Part D
When a drug company (or any health care company, for that matter) deceives the public about the safety or efficacy of its products, each of these “payors” is harmed when it unnecessarily pays or overpays for the drug in question.
Let’s focus for a moment just on the payments that all of these different people and payors made unnecessarily for Vioxx (and not on the untold suffering and medical cost imposed on those who actually had heart attacks, and their families). How do each of the types of payors described above get reimbursed for their payments? Through a fragmentary and overlapping and somewhat illogical system of separate lawsuits, in which the same facts have to be demonstrated again and again (unless, as hopefully will happen, Judges apply the doctrine of “collateral estoppel,” in which Merck would not be able to argue again and again in each suit that they didn’t know about the risks until they withdrew the drug). So, in a situation such as this you have:
- Class action lawsuits on behalf of third party payors and consumers — sometimes in the same lawsuits (as in the consolidated proceedings currently before the U.S. District Court in New Orleans), and sometimes in separate lawsuits (as in New Jersey state court, where a consumer class action was filed separately from the TPP class action which the NJ Supreme Court just ruled on recently).
- Lawsuits brought by state Attorneys General on behalf of their state Medicaid programs, state employee health programs, state prisons, programs for the elderly and disabled, and others. At times, these Attorneys General participate in the class actions described above.
- Lawsuits on behalf of cities and counties, to recoup funds spent on Vioxx for city and county employees
- False Claims Act lawsuits on behalf of federal programs such as Medicare (however, Medicare Part D didn’t go into effect until 2006, long after Vioxx was off the market
In this mix you have private attorneys, state Attorneys General and federal prosecutors. It makes for a rather complicated situation. It also makes for strange bedfellows – in a single class action lawsuit, you can have state Attorney Generals, large for-profit commercial insurers that cover millions of people (e.g. Aetna, Humana, United Healthcare, and some Blue Cross plans), small non-profit health plans, union health and welfare funds, self-insured employers, and millions of individual consumers. A class action is really the only way to seek restitution in these situations, in which virtually none of the people and entities who were harmed would be able to bring a lawsuit on their own. But it does make things tangled.
New York is not the first state to sue Merck over Vioxx payments (Texas, for instance, sued Merck back in June 2005). But New York in the past few years has been a leader among states in prosecuting pharmaceutical fraud, under former-New York AG Eliot Spitzer, now Governor of New York). So other states may jump on this bandwagon, in New York’s wake (to mix metaphors).
It will be interesting to see whether Merck’s promise to try every case will hold true for state Attorney Generals, whom corporate defendants are often loath to try to intimidate.
Friday, June 15th, 2007
The Attorneys General of 34 states and DC announced on Tuesday a $5.5 million settlement with Warner Chilcott. The settlement addresses the AGs’ claims that Warner paid Barr laboratories $20 Million to not bring a generic version of the contraceptive Ovcon to the market. Such settlements are called “reverse payment settlements” because they involve a brand-name drug company that is suing to block a generic from coming to market paying off the generic drug company defendant.
Some notable features of the settlement include:
- Warner is prohibited from entering into any agreement that would limit the research, development, manufacture, or sale of a generic alternative to one of its drugs.
- Warner Chilcott must provide the states notice of agreements it enter into with generic manufacturers. The Medicare Modernization Act instituted a requirement that drug companies provide copies of such agreements to the Federal Trade Commission, which the FTC uses to issue annual reports regarding such settlements. This settlement appears to extend this requirement to the AGs of these 34 states and DC.
While this settlement is a positive development, dealing with such collusive settlements case-by-case and drug-by-drug is inadequate. Congress must step in to ban these settlements, which undermine the system for hastening generic drugs to market that was created by the Hatch-Waxman Act. PAL and 20 other organizations recently urged the House Energy and Commerce Committee to report out a bill that would do just that, HR 1902, the “Protecting Consumer Access to Generic Drugs Act of 2007.”
Reverse payment settlements are just one of the obstacles to Americans being able to purchase cheaper and equally effective generic drugs. Others include:
- So-called “Authorized Generics,” in which a brand-name drug company introduces a “fake generic” just as the first true generic comes onto the market. These fake generics undermine the first true generic’s 180 day “exclusivity” period, in which it gets to be the only generic on the market. This 180 days is built into the law so that generic companies are able to recoup the expenses they incur to bring a generic to market — expenses which are substantial, given the arsenal of tactics that brand-name drugmakers bring out to block access to cheaper generics.
- Frivolous “citizen petitions” that brand-name drug makers file with the FDA, seeking only to delay the FDA’s approval of a generic drug’s application.
- Bogus and duplicative patents filed by brand-name drug makers with the Patent & Trademark Office (PTO). Drug makers use such additional patents to extend their patent monopoly, and thus keep generics off the market longer.
- Frivolous patent infringement lawsuits, in which brand-name drug companies sue generic drug makers even though they know they will not prevail. Brand-name drug companies get an automatic 30-month extension on their patent if they file such lawsuits, regardless of whether their patent is valid. An extra 30 months can be worth billions, so the incentive to file such lawsuits is nearly impossible to resist. There is perhaps no greater return on investment (ROI) in the pharmaceutical marketplace — a few million spent on a patent lawsuit can translate into billions in additional sales.
- A backlog of over 800 generic drug applications at the FDA. The FDA’s Office of Generic Drugs needs adequate funds to hire enough reviewers to process these applications and eliminate the backlog.
Each of these obstacles cries for legislative and regulatory changes. But, given the Senate’s unwillingness to include in the reauthorization of the Prescription Drug User Fee Act (PDUFA) any significant challenge to Big Pharma’s stranglehold over the FDA, such changes don’t seem forthcoming any time soon.