WASHINGTON — The Supreme Court on Tuesday favored investors seeking to sue companies for failing to reveal adverse information about their products in a 9-0 ruling against a drug company that did not disclose its cold medicine was linked to a loss of smell.
The case involved Matrixx Initiatives and its over-the-counter Zicam Cold Remedy, which had been sold as a nasal spray and gel, and, according to the high court, had accounted for about 70% of Matrixx’s sales.
I know, I know, I was pretty flabbergasted too. So now investors can sue to get information about companies are hiding, corporations do not have a right to “personal privacy”, and drug companies can continue to pay generic manufacturers not to compete against their blockbuster drugs.
WASHINGTON (Reuters) – The Supreme Court let stand a ruling that drug companies can pay rivals to delay production of generic drugs without violating federal antitrust laws.
The justices refused to review a federal appeals court ruling that upheld the dismissal of a legal challenge to a deal between Bayer AG and Teva Pharmaceutical Industries Ltd’s Barr Laboratories. Bayer paid Barr to prevent it from bringing to market a version of the antibiotic drug Cipro.
The Federal Trade Commission has opposed such deals, saying they violate antitrust law and cost consumers an estimated $3.5 billion a year in higher prescription drug prices. It has supported legislation pending in Congress to prohibit such settlements, which it says have increased in recent years.
So it looks like two steps forward and one step back. I had always figured that competition from generics couple with the expiration of patent protection and mixing in twenty years would factor heavily in solving the “medicare crisis” (which is largely based on cost, which is increasingly coming from drugs). Generics usually cost a small fraction of what the name brand drugs do.
Now the SCOTUS has essentially put its blessing on the idea that you can pay people not to compete with you…and that it’s not an anti-trust violation, despite the fact that a patent is itself a government approved monopoly (pretty much by definition).
I was hoping to see this business practice end (since it seems very reminiscent of organized crime), but now I’d expect it to expand.