CINDY WALSH FOR GOVERNOR OF MARYLAND IS THE ONLY CANDIDATE FIGHTING GLOBAL CORPORATE CONTROL OF OUR ECONOMY!
DO YOU KNOW WHY THE MEDIA HAS MADE A CIRCUS OF THE RIDICULOUS HEALTH CARE SYSTEM ROLL-OUT? IT TAKES ALL OF THE MEDIA ATTENTION FROM WHAT IS REALLY HAPPENING WITH THE AFFORDABLE CARE REFORM.
I'll move on to Social Security on Friday but wanted to look specifically at what will happen with the Affordable Care Act in place as affects PHARMA. Remember, Trans Pacific Trade Pact acts to curb all subsidy to PHARMA in nations joined to this treaty and to curb manufacturing of generics----a big business in developing nations. Bill Gates and his PHARMA empire want to maximize profits by getting rid of generics and extending patenting rights to name brand. That is what TPP does. We already know what happens when an industry develops global markets-----the prices climb to 'market-value' and start being inflated by market speculation and manipulation. So, we know PHARMA prices will soar with ACA. Look below to see some of the effects already as drugs become scarce because they do not bring profits and generic prices rise as nations around the world are forced to close generic PHARMA factories.
THE UNITED STATES IS DOING THIS AND IT IS OBAMA AND THE NEO-LIBERALS IN CONGRESS ALLOWING HEALTH CORPORATIONS TO WRITE THESE POLICIES.
Keep in mind as well-----when all this instability in pricing that comes with global market pricing and speculation, small businesses will not be able to stay in business. There goes more small businesses in our communities....our local pharmacies. Each time neo-liberals introduce these consolidation and deregulation policies as Clinton did and now Obama----an entire industry becomes controlled by the few global corporations at the top and prices soar, quality disappears, and service declines.
THIS IS WHAT WILL HAPPEN IF THE AFFORDABLE CARE ACT IS ALLOWED TO CONTINUE. NEO-LIBERALS WORK FOR WEALTH AND PROFIT----THEY ARE NOT DEMOCRATS.
Expanded and Improved Medicare for All takes all of the global health systems out of the mix eliminating private insurers......controlling profit-margins through public market-share. Cindy Walsh for Governor of Maryland will build several small generic manufacturing facilities across Maryland to supply the citizens with all the generics they need and we can contain the costs.
Pharmacists concerned about drug pricing, Affordable Care Act
Posted: Sep 30, 2013 4:39 PM EST Updated: Sep 30, 2013 4:47 PM EST By Rebecca Trylch l SWARTZ CREEK (WJRT) - (09/30/13) - The lead-up to the beginning phases of the Affordable Care Act has been a roller coaster ride for some independent pharmacies.
In recent months some pharmacists say generic drug prices have uncharacteristically spiked.
A couple of the pharmacists ABC12 spoke with directly tie that roller coaster effect to the Affordable Care Act, also referred to as Obamacare. Others aren't ready to link the two together.
But here's what pharmacist Mark Luea with Luea Pharmacy in Swartz Creek tells us has happened to him.
Since June he's seen several of his generic prescription drug prices go up, drastically.
One example he provided involved an anti-seizure medication.
It was just under $135 one week. The very next week that same drug cost more than $1,600.
"When I see the drastic prices, our jaws drop," Luea said. "This is not normal. This is the first time I've seen anything like this in the pharmaceutical market in 30 years."
When Luea questioned the increase, he was first told there was an issue with the raw materials.
Then he was told a contamination issue shut down the place it was made in India, causing a supply shortage.
Later he was told by his wholesale supplier, who he buys most of his prescription drugs from, that manufacturers were to blame.
"Apparently the manufacturers are concerned that their profits are going to be cut horribly by the Affordable Care Act. So it's kind of the feast and famine, and right now they're really feasting," Luea said. "They're worried about a fixed profit that is going to be starting Jan. 1, 2014."
Luea says the ever-changing prices has lead to a related battle with health insurance companies that is costing him money.
Sometimes insurance companies won't reimburse him for the full cost that he paid.
"So who gets hurt? The pharmacy, not just my retail pharmacy, all retail pharmacies, and of course ultimately the consumer," Luea said.
He hopes this struggle isn't permanent.
"I truly, truly believe that the wholesale manufacturers of generic drugs will continue this high pricing right up until Dec. 31. After that, we'll see."
The Michigan Pharmacists Association is concerned about drug pricing and insurance reimbursement problems too.
And while it's not linking the issue to the Affordable Care Act, it is urging its members to contact their state lawmakers.
Chief Executive Officer Larry D. Wagenknecht also released this statement:
"When the pharmacist's cost to purchase generic prescription drugs increases, insurance companies and pharmacy benefit managers are very slow at raising their reimbursement rates, sometimes taking week to months. Because of this, pharmacists are unable to provide the essential medications and treatments required to care for their patients."
As you see below, the ACA hands ever more ability of states to decide all avenues of health care and policy so each state will look differently as to how it will meet the continual gutting of funding of Medicare and Medicaid-----if you are going to dismantle a Federal program you first piecemeal the power of policy and that is what the ACA does.
Looking at drug costs we already see where citizens are having to make decisions as to what health insurance plan to buy according to what PHARMA or medical procedures it covers. Everyone knows a person cannot be adequately covered under this process and that such piece-mealing with make costs soar for the American people trying to get what they need. This is happening first with the lower-level plans like Medicaid and Bronze plans but it will engulf Medicare as it ends as a Federal program and the costs to upper-tier plans like Silver and Gold plans will take more and more disposable income from the upper-middle.
THE BOTTOM LINE IS THAT THE CREATION OF GLOBAL HEALTH SYSTEMS DRIVEN BY WORLD MARKETS WILL COMPLETELY DISMANTLE OUR FEDERAL PROTECTIONS AND BENEFITS WE RECEIVE THROUGH OUR FEDERALLY RUN HEALTH PROGRAMS.
Remember, this is exactly what happened to the financial industry when Clinton deregulated and consolidated to create the global banking system. We are now paying for financial services with fees for every single service----and that will be what health care will look like under ACA. You will be forced to purchase your health plan like you do cable television stations.
Raise your hands if you knew that handing the responsibility of controlling health costs to the very health institutions creating the soaring costs would result in the American people unable to access most health care and in this case PHARMA! EVERYONE. So, when the Affordable Care Act states its intentions were to lower cost and all we see is what happens when corporations are encouraged to consolidate and grow in power----maximization of profit by any means------
WE KNOW THAT NEO-LIBERALS ARE LYING ABOUT THE INTENT OF THE AFFORDABLE CARE ACT.
'Although the money for covering uninsured Americans is coming from Washington, the heath care law gives states broad leeway to tailor benefits, and the local approach can also allow disparities to emerge'.
Drug Cost May Vary Greatly By State After Obamacare Implementation
By RICARDO ALONSO-ZALDIVAR 05/13/13 11:35 AM ET EDT
WASHINGTON — Cancer patients could face high costs for medications under President Barack Obama's health care law, industry analysts and advocates warn.
Where you live could make a huge difference in what you'll pay.
To try to keep premiums low, some states are allowing insurers to charge patients a hefty share of the cost for expensive medications used to treat cancer, multiple sclerosis, rheumatoid arthritis and other life-altering chronic diseases.
Such "specialty drugs" can cost thousands of dollars a month, and in California, patients would pay up to 30 percent of the cost. For one widely used cancer drug, Gleevec, the patient could pay more than $2,000 for a month's supply, says the Leukemia & Lymphoma Society.
New York is taking a different approach, setting flat dollar copayments for medications. The highest is $70, and it would apply to specialty drugs as well.
Critics fear most states will follow California's lead, and that could defeat the purpose of Obama's overhaul, because some of the sickest patients may be unable to afford their prescriptions.
"It's important that the benefit design not discriminate against people with chronic illness, and high copays do that," said Dan Mendelson, president of Avalere Health, a data analysis firm catering to the health care industry and government.
Avalere's research shows that 1 in 4 cancer patients walks away from the pharmacy counter empty-handed when facing a copay of $500 or more for a newly prescribed drug.
"You have to worry about a world where if you happen to contract cancer or multiple sclerosis, you are stuck with a really big bill," Mendelson said. "It's going to be very important for states to take a long, hard look at their benefit design."
Although the money for covering uninsured Americans is coming from Washington, the heath care law gives states broad leeway to tailor benefits, and the local approach can also allow disparities to emerge.
A spokesman for Covered California said state officials are trying to balance between two conflicting priorities: comprehensive coverage and affordable premiums.
"We are trying to keep the insurance affordable across the board," said Dana Howard, the group's spokesman. "This is just part of trying to manage the overall risk of the pool." Covered California is one of the new state marketplaces where people who don't get coverage on the job will be able to shop for private insurance starting this fall. Coverage takes effect Jan. 1.
Insurers are forecasting double-digit premium increases for individual policies, as people with health problems flock to buy coverage previously denied them. The Obama administration says the industry warnings are overblown, and that for many consumers, premium increases will be offset by tax credits to help buy insurance. And officials say it's important to realize that the law sets overall limits on patients' liability, even if those seem high to some people. Still, a full picture of costs and benefits isn't likely to come into focus until the fall.
Howard said California officials are aware of the concerns about drug costs and are trying to make medications more affordable.
Meanwhile, he said consumers will be protected because the law limits total out-of-pocket costs – the deductibles and copayments that policy holders are responsible for, apart from monthly premiums. In California, the annual out-of-pocket limit for an individual is $6,400, although it can be as low as $2,250 for low-income people. Once that limit is reached, insurance pays 100 percent.
That's still a lot of money, and such reassurances haven't dispelled the concerns.
"The intent of the Affordable Care Act is to make sure that all Americans have access to quality, affordable health care," said Brian Rosen, a senior vice president of the Leukemia & Lymphoma Society. He adds that there is a danger that the insurance marketplaces "will discriminate against the patients with the highest medical need. That would completely undermine the spirit of the ACA."
The group has been joined by Rep. Doris Matsui, D-Calif., in urging state officials to reconsider the policy. The high copays "could prevent many patients from receiving the lifesaving treatments they need because of prohibitively high cost," Matsui wrote to the state.
The problem with costly drugs is similar to another money issue with the health care law – a provision that could price millions of smokers out of coverage. Insurers are allowed to charge tobacco users buying an individual policy up to 50 percent higher premiums. For a 55-year-old smoker, the penalty could reach nearly $4,250 a year, on top of the standard premium. California is trying to override that problem by passing its own law. There's also pending state legislation to address some issues with prescription costs, but its prospects are unclear.
Meanwhile, leukemia patient Lisa Lusk worries about what will happen to her. A nursing assistant who lives near Fresno, Lusk is hoping to return to work in the next few months. When that happens, she expects to lose emergency coverage she's now getting through the state. And the medication Lusk takes to manage her chronic form of the disease costs more than $5,000 a month.
"I'm scared that when I get a job my copay may be more than $1,500 a month," said Lusk. "I'll just be working to pay for my medications."
So, the health market manipulation begins as Obama's Health Secretary says------she does not see the state health plans under ACA as FEDERAL HEALTH CARE PROGRAMS HELD TO FEDERAL PROTECTIVE LAWS. So, bring the fraud and corruption on says the neo-liberal Sebelius-------lying, cheating, and stealing rules with the Affordable Care Act.
'HHS Secretary Kathleen Sebelius on October 30 sent a letter that threatens to further exacerbate health insurance affordability concerns. The Sebelius letter to Rep Jim McDermott (D-WA) says that HHS “does not consider” qualified health plans under the Affordable Care Act to be “Federal health care programs” for purposes of federal anti-kickback rules. Pharmaceutical industry representatives cheered this letter because, in their view, it gives a green light to the use of copay coupons'.
Remember, Obama appointed Sebelius knowing this Kansas insurance regulator had a history of working for the health insurance industry, not the public. So, having Sebelius set the legal stage for making it harder for the public to seek justice from abuse of the Affordable Care Act would be expected. Below you see the conversation over 'co-pay coupons' designed to undermine any effort to make these state insurance systems 'affordable'. What will people who cannot meet co-pays and deductibles do to access the most limited amount of care? Go to coupons.
Keep in mind as well, the ACA is premised completely on high levels of subsidy and in this age of massive corporate fraud and exploding economies drawing government coffers deeper into debt------
THOSE SUBSIDIES WILL DISAPPEAR JUST AS PUBLIC SECTOR EMPLOYEE BENEFITS ARE DISAPPEARING.
Can you imagine as a family trying to figure out how to buy insurance with a hodge-podge of coverage designed to have costs soar if you need to go outside of what is listed in a plan?
WAKE UP PEOPLE-----YOU ARE BEING TAKEN TO THE CLEANERS AND THIS IS LIFE AND DEATH!
Simply ending this very private and profit-driven state health system and replacing it with Expanded and Improved Medicare for All will keep our Federal Medicare program strong and keep health care coverage standard for all.
MARYLAND HAS ONE OF THE WORST OF PRIVATE HEALTH PLANS AND HAS ALREADY MOVED AWAY FROM ANY FEDERAL OVERSIGHT. IT ALSO HAS THE GREATEST HEALTH DISPARITIES.
Insurance Premiums Affordable Care Act — HHS Blind Eye to Copay Coupons Will Lead to Increased Health Insurance Premiums
11-7-2013 | 1 Comment | Edward C Lawrence
As if the White House and the Department of Health and Human Services (HHS) weren’t already feeling political heat over the botched federal health insurance website launch and over health insurance cancellation letters and increased premiums for millions of Americans, HHS Secretary Kathleen Sebelius on October 30 sent a letter that threatens to further exacerbate health insurance affordability concerns. The Sebelius letter to Rep Jim McDermott (D-WA) says that HHS “does not consider” qualified health plans under the Affordable Care Act to be “Federal health care programs” for purposes of federal anti-kickback rules. Pharmaceutical industry representatives cheered this letter because, in their view, it gives a green light to the use of copay coupons.
We have written about how drug manufacturer copay coupons for brand-name drugs increase health insurance costs by undercutting health plan incentives for beneficiaries to use equally appropriate generic or less-expensive brand drugs. In an interview we published in September, Kevin G. McAnaney, a former official in the HHS Inspector General’s office, talked about how the use of copay coupons in connection with federally-subsidized health insurance plans under the Affordable Care Act would likely violate federal anti-kickback laws. In McAnaney’s view, federally subsidized plans under the Affordable Care Act, whether purchased on the federal exchange or in state exchanges, are “Federal health care programs” subject to criminal anti-kickback laws. McAnaney talked about the potential legal exposure of pharmaceutical companies offering copay coupons and pharmacies accepting them.
Secretary Sebelius’s letter stating that HHS does not consider ACA health insurance plans to be “Federal health care programs” provides absolutely no legal justification for its conclusion. The letter correctly recites that under the relevant portion of the anti-kickback law, a “Federal health care program” is “any plan or program that provides health benefits, whether directly, through insurance, or otherwise, which is funded directly, in whole or in part, by the United States Government…or any State health care program….” But then the letter simply states that the department “does not consider” qualified health plans and other programs related to the Federal health exchange to be “Federal health care programs.” The letter goes on to say this includes the State-based and Federally-facilitated Marketplaces; the cost-sharing reductions and advance payments of the premium tax credit; navigators and other federally-funded consumer assistance programs; and co-op health plans. According to the letter, this “conclusion was based upon a careful review of the definition of ‘Federal health care program’ and an assessment of the various aspects of each program under Title I of the Affordable Care Act and consultation with the Department of Justice.” That’s the entirety of the HHS rationale!
Fortunately for those whose health insurance premiums would be increased if copay coupons are allowed under Affordable Care Act plans, the HHS letter is not the final word. The Sebelius letter does not, and cannot, change the underlying Federal anti-kickback rules that will almost certainly be interpreted by the courts. According to a Wall St. Journal article, “Branded Drugs Chalk Up a Win Under Health Law” (Nov. 3, 2013), the “Pharmaceutical Care Management Association plans to challenge the HHS determination.” The HHS decision “also could be reversed …by one of the lawsuits that union health-insurance plans and other plaintiffs have filed to block copay-card use, or by a probe by the HHS Office of Inspector General into illegal copay-card use by Medicare Part D beneficiaries.”
Perhaps more of a risk for drug companies and pharmacies involved with copay coupons is the threat of Federal False Claims Act suits brought by private parties. A Bloomberg BNA story, “Sebelius: ACA Exchange Plans Are Not ‘Federal Health Care Programs’” (Oct. 31, 2013) (subscription) quotes Arnold & Porter attorney Kirk Ogrosky as saying the HHS decision “simply opens the door to coupons in exchanges, but it also signals that relator’s counsel are free to file False Claims Act cases.” The False Claims Act gives a significant incentive to private parties to file qui tam, or whistleblower, suits even when government agencies may not be interested in doing so. As an example, on November 4, 2013, the Justice Department announced that pharmaceutical manufacturer Johnson & Johnson would pay $2.2 billion to resolve criminal and civil liability and that whistleblowers would receive nearly $168 million from that.
In what appears to be a belated recognition of the adverse implications for health insurance underwriting resulting from the Sebelius letter, the Centers for Medicare and Medicaid Services (part of HHS) on November 4 released guidance encouraging health insurance issuers to reject support of cost-sharing payments by commercial entities. While not specifically mentioned in the CMS guidance, the discouraged practices clearly include drug company copay coupons:
The Department of Health and Human Services (HHS) has broad authority to regulate the Federal and State Marketplaces (e.g., section 1321(a) of the Affordable Care Act). It has been suggested that hospitals, other healthcare providers, and other commercial entities may be considering supporting premium payments and cost-sharing obligations with respect to qualified health plans purchased by patients in the Marketplaces. HHS has significant concerns with this practice because it could skew the insurance risk pool and create an unlevel field in the Marketplaces. HHS discourages this practice and encourages issuers to reject such third party payments. HHS intends to monitor this practice and to take appropriate action, if necessary.
We would not be surprised to see the HHS Inspector General and/or Congressional committees inquire into the decision process behind the Sebelius letter.
The last article will talk about the Obama administration 'fighting' what we all know will be the result of PHARMA amassing huge wealth through global markets-----buying off any market-mechanism that will take market share away from big PHARMA. Obama and neo-liberals took PHARMA out of the health reform issue by making sure none of the reform hurt PHARMA and indeed, these corporations will be cashing in big time as the world's citizens are soaked for the very life-saving drugs we have all been used to accessing.
The number of people made unable to access ordinary PHARMA will be in the hundreds of millions if not a billion and many of those will be right here in the US. This article on TPP talks of how the drug distribution in developing worlds will change but remember-----
OBAMA AND NEO-LIBERALS HAVE TPP SITTING THERE AND NEO-LIBERALS IN STATES LIKE MARYLAND ARE ALREADY PASSING THE LAWS THAT ALLOW ALL OF THESE TPP REQUIREMENTS BE MET.
This is what Maryland's Sharfstein and Barbot have been doing as head of Maryland and Baltimore Health Departments.....creating the structures that will deliver this tiered level of access and the third world clinic care/home health care that will handle people dying from lack of access to ordinary care. Johns Hopkins has built an entire global health tourism system on the backs of Baltimore citizens lack of access from stolen Medicare and Medicaid leaving longevity inequity of 30 years. This is what the Affordable Care Act makes standard all across America.
THOSE 'COST SAVINGS' FROM BUNDLED PAYMENTS MEANS YOU AND I WILL BE NICKEL AND DIMED TO DEATH IN THE PURSUIT OF MAXIMIZING PROFIT.
As Obama uses the Federal legal system to 'fight in court' what we all know corporations with increasing size and wealth will do-----Obama is pushing to fast-track the TPP which he has spent his entire time in office working with corporations to write. Bush and neo-cons started TPP and Obama and neo-liberals are trying to finish the deal.
WE DON'T KNOW WHAT IS IN TPP SHOUT YOUR DEMOCRATIC INCUMBENT! THE ENTIRE AFFORDABLE CARE ACT BUILDS THE STRUCTURES TO INSTALL TPP FOR GOODNESS SAKE AND YOUR POLS KNOW IT.
The Trans-Pacific Partnership and Public Health
The TPP would provide large pharmaceutical firms with new rights and powers to increase medicine prices and limit consumers' access to cheaper generic drugs. This would include extensions of monopoly drug patents that would allow drug companies to raise prices for more medicines and even allow monopoly rights over surgical procedures. For people in the developing countries involved in TPP, these rules could be deadly - denying consumers access to HIV-AIDS, tuberculosis and cancer drugs.
The TPP would establish new rules that could undermine government programs in developed countries. The TPP would control the cost of medicines by employing drug formularies. These are lists of proven medicines that the government selects for use by government health care systems. Lower prices are negotiated for bulk purchase of such drugs and new medicines that are under monopoly patents are not approved if less expensive generic drugs are equally effective. Drug firms would be empowered to challenge these decisions and pricing standards. In the United States, these rules threaten provisions included in Medicare, Medicaid and veterans' health programs to make medicines more affordable for seniors, military families and the poor.
TPP would empower foreign pharmaceutical corporations to directly attack our domestic patent and drug-pricing laws in foreign tribunals. Already under NAFTA, which does not contain the new rules proposed for TPP, drug firm Eli Lilly has launched such a case against Canada, demanding $100 million for the government's enforcement of its own patent standards.
The TPP would also empower foreign corporations to directly challenge domestic toxics, zoning, cigarette and alcohol and other public health and environmental policies to demand taxpayer compensation for any such policies that undermine their expected future profits. Often initiatives to improve such laws are chilled by the mere filing of such an "investor-state" case. In other instances, countries eliminate the attacked policies. For instance Canada lifted a ban on a gasoline additive already banned in the U.S. as a suspected carcinogen after an investor attack by Ethyl Corporation under NAFTA. It also paid the firm $13 million and published a formal statement that the chemical was not hazardous.
How do you end the availability of generics? You create massively wealthy global PHARMA corporations that can afford to buy out all deals to form generic-producing companies. ARE YOU SURPRISED THAT THIS IS ALREADY HAPPENING? How have large corporations always gained market share-----by stamping out the competition. So, big PHARMA sees a group of business people planning to create a generic manufacturing of a brand name drug and simply pay them not to.
That is what is happening all over the world. So, when the Affordable Care Act sends more money to funding generic medication for the American people at the same time they know the consolidation of the health industry will give such power to these global health systems as to eliminate the production of generics-----THEY ARE LYING TO YOU AS TO THE INTENT OF THE ACA.
One more point with what is called 'biologics'. For those noticing a corporation like Johns Hopkins now having a BIOTECH campus attached to its campus......this is the patent pipeline to new PHARMA that will hit the market. ACA allows 'biologics' to hit the market with little FDA oversight or clinical trial requirements. It will fast-track what will be multiple versions of 'generic' protein-based PHARMA allowing a corporation like Johns Hopkins to hit the market with drug after drug having no real value but earning money simply through winning market share with marketing. All of this is completely without value to society----it is simply happening to allow Johns Hopkins to make a slight change in PHARMA formula to patent and sell. All of the manipulation of the drug market with the few methods I shared today will explode and the quality of drug most people will receive will deteriorate. The most current drugs will be unattainable for most and the availability of what will be called 'generic' will be limited to PHARMA that is so old-----as to have no efficacy.
ALL OF MARYLAND POLS KNOW THIS IS WHAT IS IN STORE AND THEY ARE PASSING ALL THE LAWS NECESSARY AND MARYLAND IS BUILDING ONE OF THE MOST PROFIT-DRIVEN SYSTEMS IN THE NATION.
Court: Can drug companies pay to delay generics?
By JESSE J. HOLLAND and LINDA A. JOHNSON March 24, 2013 11:51 PM WASHINGTON (AP) --
Federal regulators are pressing the Supreme Court to stop big pharmaceutical corporations from paying generic drug competitors to delay releasing their cheaper versions of brand-name drugs. They argue these deals deny American consumers, usually for years, steep price declines that can top 90 percent.
The Obama administration, backed by consumer groups and the American Medical Association, says these so-called "pay for delay" deals profit the drug companies but harm consumers by adding 3.5 billion annually to their drug bills.
But the pharmaceutical companies counter that they need to preserve longer the billions of dollars in revenue from their patented products in order to recover the billions they spend developing new drugs. And both the large companies and the generic makers say the marketing of generics often is hastened by these deals.
The justices will hear the argument Monday.
Such pay-for-delay deals arise when generic companies file a challenge at the Food and Drug Administration to the patents that give brand-name drugs a 20-year monopoly. The generic drugmakers aim to prove the patent is flawed or otherwise invalid, so they can launch a generic version well before the patent ends.
Brand-name drugmakers then usually sue the generic companies, which sets up what could be years of expensive litigation. When the two sides aren't certain who will win, they often reach a compromise deal that allows the generic company to sell its cheaper copycat drug in a few years — but years before the drug's patent would expire. Often, that settlement comes with a sizeable payment from the brand-name company to the generic drugmaker.
Numerous brand-name and generic drugmakers and their respective trade groups say the settlements protect their interests but also benefit consumers by bringing inexpensive copycat medicines to market years earlier than they would arrive in any case generic drugmakers took to trial and lost. But federal officials counter that such deals add billions to the drug bills of American patients and taxpayers, compared to what would happen if the generic companies won the lawsuits and could begin marketing right away.
A study by RBC Capital Markets Corp. of 371 cases during 2000-2009 found brand-name companies won 89 at trial compared to 82 won by generic drugmakers. Another 175 ended in settlement deals, and 25 were dropped.
Generic drugs account for about 80 percent of all American prescriptions for medicines and vaccines, but a far smaller percentage of the $325 billion spent by U.S. consumers on drugs each year. Generics saved American patients, taxpayers and the healthcare system an estimated $193 billion in 2011 alone, according to health data firm IMS Health.
But government officials believe the number of potentially anticompetitive patent settlements is increasing. Pay-for-delay deals increased from 28 to 40 in just the last two fiscal years and the deals in fiscal 2012 covered 31 brand-name pharmaceuticals, Federal Trade Commission officials said. Those had combined annual U.S. sales of more than $8.3 billion.
The Obama administration argues the agreements are illegal if they're based solely on keeping the generic drug off the market. Solicitor General Donald Verrilli, speaking at Georgetown Law School recently, noted that once a generic drug gets on the market and competes with a brand-name drug, "the price drops 85 percent." That quickly decimates sales of the brand-name medicine.
"These agreements should actually be considered presumptively unlawful because of the potential effects on consumers," Verrilli said.
In the case before the court, Brussels, Belgium-based Solvay — now part of a new company called AbbVie Inc. — reached a deal with generic drugmaker Watson Pharmaceuticals allowing it to launch a cheaper version of Solvay's male hormone drug AndroGel in August 2015. Solvay agreed to pay Watson an estimated $19 million-$30 million annually, government officials said. The patent runs until August 2020. Watson, now called Actavis Inc., agreed to also help sell the brand-name version, AndroGel.
Actavis spokesman David Belian disputed the government's characterization of the agreement with Solvay. Belian said that in addition to licensing agreement over Solvay's Androgel patents, Watson was being compensated for using its sales force to promote Androgel to doctors.
AndroGel, which brought in $1.2 billion last year for AbbVie, is a gel applied to the skin daily to treat low testosterone in men. Low testosterone can affect sex drive, energy level, mood, muscle mass and bone strength.
The FTC called the deal anticompetitive and sued Actavis.
The 11th U.S. Circuit Court of Appeals in Atlanta rejected the government's objections, and the FTC appealed to the Supreme Court.
The federal district and appellate courts both ruled against the government, AbbVie, which is based in North Chicago, Ill., said. "We are confident that these decisions will be upheld by the Supreme Court."
The Generic Pharmaceutical Association's head, Ralph Neas, said the settlements are "pro-consumer, pro-competition and transparent." He said every patent settlement to date has brought a generic drug to market before the relevant patent ended, with two-thirds of the new generic drugs launched in 2010 and 2011 hitting the market early due to a settlement.
"By doing what the FTC wants, you're going to hurt consumers rather than help them," said Paul Bisaro, CEO of Actavis of Parsippany, N.J.
Bisaro said consumers will save an estimated $50 billion just from patent settlements involving Lipitor, the cholesterol-lowering drug made by Pfizer Inc. of New York that reigned for nearly a decade as the world's top-selling drug.
Lipitor's patent ran until 2017, but multiple generic companies challenged it. Pfizer reached a settlement that enabled Actavis and a second company to sell slightly cheaper generic versions starting Nov. 30, 2011 and several other generic drugmakers to begin selling generic Lipitor six months later. The price then plummeted from Pfizer's $375 to $530 for a three-month supply, depending on dosage, to $20 to $40 for generic versions.
Because generic companies tend to challenge patents of every successful drug, the FTC's position would impose onerous legal costs on brand-name drugmakers and limit their ability to fund expensive research to create new drugs, said the Pharmaceutical Research and Manufacturers of America, which represents brand-name drugmakers.
According to the 2010 RBC Capital Markets study, when trial victories, settlements between drugmakers and dropped cases are combined, generic companies were able to bring their product to market before the brand-name drug's patent expired in 76 percent of the 371 drug patent suits decided from 2000 through 2009.
Consumer, doctor and drugstore groups have lined up to support the Obama administration in this case.
"AARP believes it is in the interest of those fifty and older, and indeed the public at large, to hasten the entry of generic prescription drugs to the marketplace," said Ken Zeller, senior attorney with the AARP Foundation Litigation. "Pay-for-delay agreements such as those at issue in this case frustrate that public interest."
The American Medical Association, the giant doctors' group, believes pay-for-delay agreements undermine the balance between spurring innovation through patents and fostering competition through generics, AMA President Dr. Jeremy A., Lazarus said. "Pay for delay must stop to ensure the most cost-effective treatment options are available to patients."
Drugstores also believe pay-for-delay deals "pose considerable harm to patients because they postpone the availability of generic drugs which limits patient access to generic medications," said Chrissy Kopple of the National Association of Chain Drug Stores.
Eight justices will decide this case later this year. Justice Samuel Alito did not take part in considering whether to take this case and is not expected to take part in arguments.