Supreme Court Strikes Down Pay For Delay Deals in Pharmaceutical Industry

Let’s say that you have an awful disease that can only be treated by a very specific medication.  WeHatePeople Inc. is the only pharmaceuticals company that makes the medication that can save your life, but unfortunately you’d have to pay thousands of dollars for each treatment (your insurance will help, but they can’t do much).

You go to drown your sorrows at a local bar, where you just happen to see someone in a snappy button down shirt with the WeHatePeople Inc. logo on the pocket.  You decide to march up to the person to give them a piece of your mind, and halfway through your story the employee bursts into a wild sob.  They explain that they work in the legal department of WeHatePeople Inc, and that they’ve been negotiating with SlightlyLessTerribleDrugCompany LLC to delay the generic version of your life saving miracle drug.

That weird and slightly implausible situation was sad, but thanks to a Supreme Court ruling it shouldn’t happen again anytime soon.  On Monday the Supreme Court ruled that pharmaceutical manufacturers can be sued over “pay for delay” deals.  The landmark ruling was surprising because most people weren’t aware that it was perfectly legal for other companies to do this.  Pay for deal isn’t just legal, it’s pretty dang common.  The Federal Trade Commission estimates pay-for-delay deals cost drug purchasers a cool $3.5 billion a year for it.  The Supreme Court ruling could open the flood gates for an array of lawsuits from wholesalers, retailers, insurers, and anti-trust enforces.

Since the ruling can only mean good things for the public, pharmaceutical lobbyists naturally assume that this decision will doom all of mankind.  Pharmaceutical Research and Manufacturers of America claim that the ruling will discourage companies for reaching settlements, and that it will negative affect patients and discourage investment opportunities.  They neglected to mention how having access to affordable medication is bad for patients, or how removing generic approval hurdles will negatively impact research.

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