Drug Deals
When Lyn Lovinger heads to the drug store, she's got one thing on her mind — her breast cancer medication.
"It's number one priority — I have to have it," she said.
Living only on Social Security, it costs her $25 a month.
"It's not peanuts. I'm not desperate but it's certainly somewhat of a burden," she admitted.
The burden could be significantly lighter, reports CBS News Correspondent Jim Axelrod, if there was a generic alternative to the world's leading breast cancer drug Tamoxifen, sold under the brand name Nolvadex. But there's not. That's in part because of an agreement between Astrazeneca, the maker of Nolvadex, and Barr Labs which wanted to produce a generic version.
"They did contract with each other to keep — best as I understand it — to keep Tamoxifen from being sold as a generic drug," said Lovinger.
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"It's extraordinary that a plaintiff that brings the lawsuit actually pays money to the defendant to settle the lawsuit," said Ron Pollack, a consumer health advocate.
In this case, Astrazeneca eliminated the threat of their patent being overturned on a drug that generatd $285 billion in sales that year. Barr guaranteed profits while avoiding a lawsuit that could have bankrupted the company.
"We believe this agreement doesn't pass the smell test. There's something wrong here," said Kim Shellenberger of the Prescription Access Litigation Project.
Her consumer group is suing, saying this side agreement "maintains the artificially inflated market price for Nolvadex." Barr's Tamoxifen sells for only 5 to 10 percent below the brand name instead of the usual 50 to 80 percent discount generics normally offer once a patent expires or is overturned. Barr says without the deal, there's no guarantee there would be any competition because other generic companies subsequently challenged Astrazeneca's patent — and lost.
"Had we not agreed and brought a lower cost product to market, the only alternative to consumers today would be Nolvadex, the brand product," said Bruce Downey, CEO of Barr Laboratories.
Other side deals have caught the attention of the Federal Trade Commission. In the last 16 months, the FTC has settled suits against Abbot and Hoechst for paying generic companies to go away entirely. A case against Schering-Plough is still pending.
"The result of an agreement like this is that the generic company gets paid millions of dollars for doing nothing. The brand name company eliminates competition and continues to charge monopoly prices and the consumer pays the bill," said the FTC's Mike Antalics.
The brand name drug companies are the nation's most profitable businesses and protecting their patents is what keeps them that way.
Thursday night, we'll show you the lengths they'll go to do that and why some in congress think it has to stop.
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