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Illegal Prescription For Profits?

What could be one of the biggest dirty little secrets about the high cost of prescription drugs is out in the open.

The government says four big drug companies conspired to keep cheaper versions of brand name drugs off the shelves.

Just two drugs were involved, but CBS News Medical Correspondent Elizabeth Kaledin reports the alleged consumer rip-off totals hundreds of millions of dollars.

It's estimated Americans save $10 billion a year buying generic drugs instead of brand names.

But the Federal Trade Commission says consumers have been cheated of some of these savings as the result of what they charge was an illegal scheme among four drug companies to profit by keeping generic drugs off the market.

In the first case, the FTC says the company Hoechst-Marion Roussel, makers of the best-selling heart drug Cardizem CD, paid the company Andrx, makers of a generic version of the drug, $10 million a quarter for one year to keep their product of the market.

In the second case, Abbott laboratories, which makes the blood pressure medicine Hytrin, has been charged with paying Geneva Pharmaceuticals $4.5 million a month for 17 months to delay the marketing of it's generic version.

Robert Parker of the FTC says, ”That is good for the name-brand company in that it continues its monopoly and it's high prices. It's good for the generic company in that the generic company gets a check every quarter or every month. But it's very bad for consumers who don't have the opportunity to choose to buy lower priced drugs.”

Patent laws give drug manufacturers exclusive rights to market their products for 20 years, but often generic makers find loopholes in the law allowing them to market a cheaper product. Both Andrx and Geneva had FDA approval for their drugs. Because of the patent laws governing pharmaceuticals, by delaying the sale of their products they prevented any other generic versions from being marketed.

The Andrx drug did finally come on the market last June. The company, which denies any wrongdoing, will fight the FTC charges in court. Both Abbott labs and Geneva Pharmaceuticals have settled with the FTC.

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