Solvay Pharmaceuticals Bribes Generic Drug Makers

February 3, 2009

The Facts

The maker of Androgel, Solvay Pharmaceuticals, has been accused by the Federal Trade Commission for bribing three generic drug companies to delay production of a generic for Androgel. The FTC is calling it a “pay-for-delay” agreement, and says it violates antitrust laws. The FTC has filed a suit against Solvay.

Androgel is a drug to boast testosterone for men who have cancer, low levels of the hormone, HIV/AIDS and other problems. Solvay has a 17-year patent for the drug which began in 2003. The three generic drug companies in question are Paddock Laboratories, Watson Pharmaceuticals, and Par Pharmaceuticals.

This “unwritten” policy by name-brand drug manufacturers is very common; therefore the action by Solvay Pharmaceuticals is not an isolated case. The FTC has tried to bring action against some pharmaceutical companies in the past, but was put down by the last administration. The FTC is in hopes that the Obama administration will be more sympathetic.

Solvay Pharmaceuticals is headquartered in Marietta, Georgia, but owned by the Solvay Group, headquartered in Luxembourg, Germany.

My View

Most level headed folks know that a name-brand drug maker always has a lot of R&D cost in a new drug, therefore they should be protected against generics for a period of time to recover that cost and make a reasonable profit. And that “period of time” should include sufficient time to encourage them to continue R&D on other new drugs.

Now, if you ask a drug maker how much time is “sufficient”, they are going to basically say “forever”, and knowing that, the government has to set that time-limit for them. And as we all know, that process has a built-in flaw; government involvement. But there is a time for it all to come to an end, and the name-brand drug makers knows that. However, instead of being moral and law abiding, their greed takes over and they break the law by bribing generic drug makers. And the generic drug makers, through their own greed, accept the bribe. This latter is a glaring example that the only thing that matters to corporate executives is “today”, and we’ll worry about tomorrow tomorrow. In other words, “let me get mine today, and the company can worry about it after I’m gone”. And in the meantime, we consumers are usually paying tens of times a multiple of what we should be paying.