Supreme Court Allows Generic Drug Makers to be Sued Over Payouts
The Supreme Court has finally made a ruling over whether drug manufactures can be sued over payouts to keep generic versions of brand name drugs off the market. The decision was handed down on Monday, June 17, 2013.
In the ruling, the U.S. Supreme Court decided that drug companies that pay the competition to keep cheaper generic versions of their drugs off the market can now be sued by the FTC for antitrust violation. The panel of judges voted on the issue 5 to 3, with Justice Samuel A. Alito Jr. recusing himself. This ruling threw out rulings handed down in lower courts that stated that those kinds of agreements between drug makers (called pay-for-delay agreements) are legal as long as the brand name version of the drug’s patent hadn’t expired.
Analysts in the drug industry are saying that this decision will likely cause a power shift in the drug market. Currently brand name manufacturers hold all of the power (at least until patents run out), but this decision will provide generic drug makers with more power than they previously held. Generic drug makers sell brand name drugs at a fraction of the cost, which basically makes them a more consumer friendly product in terms of filling prescriptions. This generally causes the brand name manufacturers to lose about 90 percent of market share when a generic appears on the market.
This is only one case that the Supreme Court has been looking into involving generic manufacturers. Another is based on a lawsuit filed by Gladys Mensing over the side effects linked to her use of the acid reflux medication Reglan. In that suit, Mensing tried to sue generic drug maker Pliva after she developed tardive dyskinesia, a common side effects of Reglan use. Reglan was issued a black box warning after it was discovered that the drug should only be used for short periods lasting no more than 12 weeks. Tardive dyskinesia is a neurological condition that causes patients to suffer from Parkinson’s-like symptoms, including lip smacking, uncontrollable movements of the extremities and tongue protrusion. The original ruling determined that Mensing could not sue generic drug makers over failure to warn because generic drug makers are only obligated to write warning labels exactly as they appear on their brand name counterparts. Her case was appealed and sent to the Supreme Court.