Federal Court Rules Against Big Pharma Payoffs to Generic Drug Makers


A landmark ruling, handed down today from a federal appeals court, has dismantled long-standing deals in which large pharmaceutical companies paid enormous amounts of money to keep low-cost generic drugs off the market.

The New York Times reports that the the ruling, from a federal appeals court in Philadelphia, cited the arrangements as anticompetitive and that "the stakes are enormous for brand-name drug makers, which would face lower profits."

More important, the Times said, the ruling could benefit untold Americans, pharmacies and even insurance companies.

In one particular instance, cited in the ruling, Bayer paid a generic drug maker more than $400 million to keep a lower-priced generic version off retail shelves.

The Congressional Budget Office estimates that outlawing such practices could save the federal government $4.8 billion over 10 years and could lower drug costs in the United States by $11 billion.