“Pay-to-delay” deals come under USSC scrutiny

This (Forbes) article highlights the problem in the drug market concerning its anti-competitiveness due to certain deals that are taking place between generic companies and brand-name companies, and how the legal sector can affect economic policies. The US Supreme Court met earlier this week to discuss whether the drug industry deals called “pay-to-delay” are unlawful. Used by name-brand pharmaceutical companies, these deals involve preventing the production of generic products, which costs consumers roughly $3 billion a year.

This related article (NPR) better details what the pay-to-delay deals are as well as the legal issues, as opposed to the Forbes article, which discusses how the brand-name companies have benefited from the deals. If outlawed, these deals will cease, which would allegedly increase the competitiveness of the market since the generic companies would no longer receive compensation for delaying production. This is the Court’s aim. For reference, the generics companies are on board with the deals, and are fighting in favor of preserving them alongside the brand-name companies. To my knowledge, the Court has not yet reached a decision.

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3 Responses to “Pay-to-delay” deals come under USSC scrutiny

  1. Nicky Tynan says:

    This is an excellent example of an exchange that is beneficial to both parties involved but not socially beneficial. In effect, the brand-name companies are making a deal to share some of their monopoly profits with the generics companies in return for being able to maintain a monopoly beyond the currently legal time limit.

  2. Nicole R. says:

    I found this article very interesting and was unaware of the fact that this is happening. Due to the monopolies the private companies are able to buy off the generic brands. This shows how the economy is usually under the control of whoever has the most money. In the world of medication, money is a definite issue since many people are not able to afford them because of the current patent situation and cause for losses by those in need. The generics are beneficial to those who are unable and may have to wait years for because of the private companies paying them off.

  3. kassr says:

    I, like Nicole, was unaware that this was happening. It is interesting to see how companies will maneuver their way around laws to do what is in their best interests. Following what Professor Tynan said, this is a real life example of how companies do not always do what is socially beneficial; they do what is monetarily beneficial.

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