Jul 10, 2006
The U.S. Supreme Court just put its stamp of approval on deals made by drug giant Schering-Plough to keep generic versions of K-Dur off the market.
The whole case goes back to 1995 when two companies, Upsher-Smith and American Home Products filed applications with the Food and Drug Administration to begin marketing much cheaper, generic versions of K-Dur, a blood pressure medicine.
Schering-Plough blocked the production of the generics by filing suit against the companies, which automatically triggers a two-and-a-half year hold on FDA approval of the generic.
With the two and a half years expiring, Schering-Plough came to an agreement with the two companies. It paid them NOT to manufacture their drugs – until 2001 for Upsher-Smith and until 2004 for American Home Products.
These agreements also prevented other companies from producing their own generic versions, since no other company can legally market a new generic drug until 180 days after the first company starts selling it.
We are often told that capitalist competition lowers prices. In reality, big companies have all sorts of tricks to keep prices artificially high. And the state has all sorts of mechanisms to let them get away with it.
Deals like Schering-Plough’s that allow pharmaceutical companies to keep their prices artificially high may not be the main problem with medicine today. But they are certainly a symptom of a system which uses medical care to make profit, rather than to improve the health of the population.