The big pharmaceutical with a blockbuster drug gets to have the only product on the market for a little longer. It also doesn’t have to deal with price competition. The FDA estimates generics usually cost 80 to 85 percent less than brand-name drugs — not great news for the maker of the brand-name medication.
As for the generic drug maker, it has to hold off on coming into a given market — but it also gets a settlement from a pharmaceutical, often in the millions. Not a shabby deal either.
The Federal Trade Commission, which brought the suit, has a completely different take. It argues that this is horrible for consumers, who end up with higher drug prices as generics stay off the market longer than they otherwise would. With more than a dozen pay-for-delay deals struck annually, the FTC estimates that these settlements will cost consumers $35 billion.
More from Sarah Kliff.