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Gary Passmore looked forward to the day when the generic version of Lipitor, a prescription drug used to fight high cholesterol and coronary artery disease, would be released. He'd been taking Lipitor for more than 10 years at a cost of more than $200 a month and anticipated that cost would drop when Lipitor's patent expired in 2011.
Passmore's doctor called him with different news: The generic version would cost more than Lipitor because the companies had made a deal to keep the price high.
"I could not believe it," said Passmore, vice president and director of the Congress of California Seniors. "I laughed but it was in disgust at the drug companies and what they're able to do."
Lipitor was among 20 drugs listed in a report released Thursday regarding "pay-for-delay" settlements, in which pharmaceutical companies compensate potential competitors for agreeing not to release more affordable generic versions of the brand-name drug.
The report, from the California Public Interest Research Group and Community Catalyst, a nonprofit advocate for affordable health care, said such deals enable companies to continue to sell their brand-name drugs at high prices well after their original patents have expired.
Pharmaceutical companies have defended such deals, saying they're necessary to recover the costs of developing new drugs. They've also said that such deals can speed up marketing of generic alternatives.
"People in California with heart disease, cancer and other conditions are forced to pay 10 times more than necessary because of these pay-for-delay deals," said Garo Manjikian, legislative advocate for CalPIRG.
The 20 generic drugs identified Thursday are among 142 that pay-for-delay deals have kept off the market at various times, the report said. Five are still blocked from the market.
"It's unfair that there could be a cheap generic drug out there that patients need for their health, but that they can't access because of these deals," Manjikian said.
According to the report, brand-name drugs cost an average of 10 times as much as the generic version, but can cost up to 33 times as much. The delaying deals have kept generic brands off the market an average of five years and as long as nine years, the report said.
Dr. Michael Wilkes, a professor of medicine at UC Davis, said he has patients who cut pills in half and don't take their medication according to recommended dosages because they can't afford it.
"There's not a doctor in the state of California that hasn't seen the impact," Wilkes said. "I've seen patients make bad decisions based on economics and not their health."
CalPIRG estimated that the 20 companies cited in its report have made $98 billion in total sales while the generic versions of their drugs were delayed.
"When you have price markups it distorts the whole market," Passmore said. "It drives taxes up when we're paying into the coffers of these drug companies."
Passmore now pays about $15 for a generic version of Lipitor released six months after the more expensive generic version.
CalPIRG's report comes almost a month after a U.S. Supreme Court decision upheld the Federal Trade Commission's right to challenge patent settlements that would result in pay-for-delay deals, arguing that these reverse payment schemes have the potential for significant anticompetitive effects.
"While we're disappointed that the court did not take the next step in making pay-for-delay deals unlawful, we're hopeful that Congress will," Manjikian said.
Two bills concerning pay-for-delay deals are being considered in Congress. S214 would prohibit pay-for-delay settlements, and S504 would remove incentives for such deals by allowing other companies to produce the generic drug in question.
"Now there is a case for this pay-for-delay practice being unlawful." Manjikian said. "We need Congress to step in."
Jessica Floum is a San Francisco Chronicle staff writer. E-mail: firstname.lastname@example.org
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