Fighting Generic Drugs

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Last fall Prilosec's 20-year patent was set to expire. That meant other companies could put generics on the market -- cutting in half the $150 cost of a month's supply.

But that never happened because Prilosec's maker, AstraZeneca, went to court. While the main patent had expired, AstraZeneca claimed generics would violate other patents listed for Prilosec. While the court battle rages, Prilosec remains exclusive on the market and the money keeps rolling in.

It's the new rage among makers of blockbuster drugs: fight tooth-and-nail to block generics, reports CBS News Correspondent Sharyl Attkisson. Protecting legitimate patents is perfectly legal. But critics say there's growing abuse of the system, with drug makers buying time by filing bogus patents and frivolous lawsuits.

"This system is chaotic, its anarchy," said Bradley Cameron, who represents an unusual coalition of governors and big business urgently pushing Congress to put a stop to drug patent scams. "Our view is that if you're going to wait until next year, you're going to cost governors who are scrambling for assistance on Medicaid. "

Governors estimate they're shelling out $25 million extra each month they buy Prilosec instead of a generic for Medicaid patients. Corporations hit hard include General Motors. It spent $55 million on Prilosec for workers last year. A generic could cost half that amount.

There's so much concern, the Federal Trade Commission is now looking into the Prilosec case and a host of others. But there's no easy fix with countless ways to beat the system -- like listing a new patent for no more than changing the color of a medicine bottle.

One manufacturer patented the color of their bottle arguing that it was critical because their medicine was light sensitive.

There's also the applesauce ploy. Brand name drug makers delayed a generic at the last minute by claiming a new, unique use -- patients could take the medicine in applesauce.

"They do a study to show that the product is efficacious and as a result, a generic company has to replicate an applesauce study to get the approval," said Dr. Elliot Hahn.

Hahn is on the generic side of the business. His company Andrx has won several patent disputes and is now doing battle over Prilosec. He won't comment while the case is in court, but he's chomping at the bit to turn out a cheaper version of the purple pill in his Florida factory if he wins.

Prilosec's maker, AstraZeneca, strongly denies abusing the system saying, "Patents for these vital inventions remain valid and provide legitimate protection of our intellectual property."

While the courts decide who's right, consumers are denied generic Prilosec.

Says Cameron, "Right now that's worth $11 million a day to AstraZeneca."

In the drug patent world where there's money in buying time, Prilosec's maker has already won this round.