Generic drugs can save the consumer a lot of money. But some pharmaceutical manufacturers work aggressively to keep their market for a drug that goes off patent, limiting the availability of the generic brand. Here’s an example.
The term "generic drug” usually refers to a drug that has come off patent and is manufactured by one or more generic-drug companies in addition to the company that originally held the patent. Most generic drugs reach the market when the manufacturer’s patent on the product lapses. This is good news for consumers, because generics are less expensive than the brand-name drug but provide the same medical benefit. For instance, in 2006 the anticholesterol drugs pravastatin [Pravachol] and simvastatin [Zocor] went generic, offering people who switched to the generic form a savings of about 20% for the former and 10% for the latter, judging from the prices quoted on Drugstore.com. This is not good news for the original manufacturers, which lose the exclusive right to market a brand-name product.
An interesting article reported in The New England Journal of Medicine (Volume 355, page 1297) shows just how far big pharma will go to protect its interests. This article explains that an executive at pharmaceutical manufacturer Bristol-Myers Squibb agreed to make a secret cash payment of $40 million to Apotex, a Canadian generic drug company, to maintain its monopoly over sales of clopidogrel (Plavix) until 2011.
Plavix, a top-selling drug for preventing heart attacks and strokes, costs $4 per day. The generic would cost 20% less. In the end, the deal fell through and came under investigation by the U.S. Department of Justice, although a court injunction temporarily halted marketing of the generic version.
Such secret deals to keep cheaper generic drugs off the market are not uncommon, says an editorial in The New England Journal of Medicine. Manufacturers invent new drugs and take out multiple patents to protect their exclusive right to market them. When the patents start to expire, generic manufacturers often face years of legal battles to win the right to sell the drug. As a result, these companies may turn to special deals to avoid litigation. The generic manufacturer makes money by not selling its product. The brand-name company makes money by keeping its exclusive market for a while. Patients seldom know that they have lost money in the bargain.
