Many of you may be aware that when a drug company develops a new drug, they have exclusive rights to produce that drug for 17 years. ( I'm pretty sure I've got that figure right.) After that time other companies can make generic versions of the drug that typically sell for much less than the original brand name drug. I'm guessing, though, that most of you don't know that it's legal for the original drug company to pay a generic drug company money to not produce a generic version of the drug.
An article in the September 28, 2006 edition of the NEJM tells the story of Plavix, made by Bristol Myers Squib. Forty eight million Americans use it at a cost of more than $4 per day. (I'll do the math for you: 48 million times $4 equals $192 million per day - per day!) It's patent was about to expire, so Bristol Myers agreed to pay the generic drug company Apotex $40 million - chump change for Bristol Myers - to not release the generic version of Plavix until 2011. The deal had to be approved by the FTC and Justice Department, and in this case the deal fell through.
This is only one example of what apparently is a common practive. Although the Federal government has been trying to block such agreements, judges have often approved them. As the article says, "In recent years, such settlements have generally stuck, despite federal authorities' efforts to undo them, and generics have been kept off the market" - at a cost to consumers of billions of dollars. The full story is more complicated - I've simplified it some to fit it into a few paragraphs - and I encourage you to read the whole thing (NEJM 2006; 355: 1297-1300.)
I'm not sure what surprised me more about the article, the fact that drug companies could actually do this, or the part about the federal government trying to stop them. (The feds are actually on the consumers' side?) What's not surprising, of course, is that the drug companies will do about anything for a buck. They may be called a type of health care company, but people's health is far from the first thing on their mind.