Americans may not be getting access to generic drugs, even if they are available, CNBC's David Faber reports on tonight's edition of "Business Nation."
“That’s because brand-name drug companies are paying their generic competitors millions of dollars to persuade them to delay bringing their lower-cost drugs to the public,” Faber says.
These so-called reverse payments are used to settle patent disputes between the drug companies, but while the industry favors them, critics say consumers are the losers, Faber reports.
“When these companies enter into these agreements, they’re trying to take out the competition aspect of this,” Deborah Platt Majoras, chairman of the Federal Trade Commission, told Faber. The FTC reviews each settlement to make sure they’re in the public interest.
It also undermines the purpose of the Hatch-Waxman Act, a law passed by Congress in 1984 to make it easier and faster for generic drug companies to challenge brand-name drug patents in court, before the typical 21-year lifespan of a patent expires.
Congress has proposed legislation to ban these settlements, but both brand and generic drug makers say the deals are pro-competitive because almost always, the generic company still has the right to make the branded drug before its patent runs out.
"Business Nation" airs tonight at 10 pm and 1 am New York time.