What is supposed to happen now is that lots of copycat firms rush in with “generic” (ie, chemically identical) versions of Lipitor at perhaps one-fifth of its price. Patients and health-care payers should reap the benefit. Pfizer’s revenues should suffer. The same story will be repeated many times, as other best-selling drugs march over the patent cliff (see chart).
But generics makers may face delays getting their cheaper versions to market. Ranbaxy, a Japanese-owned drugmaker, struggled to get regulators’ approval for its generic version of Lipitor, and only won it on the day the patent expired. More important, research-based drug firms are using a variety of tactics to make the patent cliff slope more gently. Jon Leibowitz, chairman of America’s Federal Trade Commission (FTC), is concerned by drugmakers filing frivolous additional patents on their products to put off the day when their protection expires.
Another tactic is “pay-for-delay”, in which a drugmaker facing a legal challenge to its patent pays its would-be competitor to put off introducing its cheaper copy. In the year to October the FTC identified what it believes to be 28 such settlements. American and European regulators are looking into these deals. However, legal challenges against them have faltered, and a bill to ban them is stuck in Congress.
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