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American Drugs are Price Fixed to Keep Them Expensive

A bill that would end an underhanded tactic that delays the introduction of generic drugs in the marketplace is pending in the Senate. The tactic, known as “pay for delay,” occurs when a brand-name drug makers pays a significant sum of money to a generic drug maker in exchange for delaying the marketing of the new generic drug.

This allows brand-name drug makers to keep earning profits without competition, while the generic drug maker gets a large sum of “easy, risk-free money.”

As the New York Times reported:

“Both companies profit. The consumer, unfortunately, loses — by paying high, brand-name drug prices instead of lower prices for a generic. The Federal Trade Commission, which has been campaigning to end the practice, estimates that pay-for-delay agreements cost consumers at least $3.5 billion a year.”

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