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Brands and generics pharmaceuticals…

The case is Federal Trade Commission v. Watson Pharmaceuticals et al, No. 12-416.  

Via the New York Times comes this note:

Last year, for the third time since 2003, the 11th Circuit upheld the agreements as long as the allegedly anticompetitive behavior that results — in this case, keeping the generic drug off the market — is the same thing that would take place if the brand-name company’s patent were upheld.

Two other federal circuit courts, the Second Circuit and the Federal Circuit, have ruled similarly. But in July, the Third Circuit Court of Appeals said that those arrangements were anticompetitive on their face and violated antitrust law.

The agreements are also affected by a peculiar condition in the law that legalized generic competition for prescription drugs. That law, known as the Hatch-Waxman Act, gives a 180-day period of exclusivity to the first generic drug maker to file for approval of a generic copy and to file a lawsuit challenging the brand-name drug’s patent.

Brand-name drug companies have taken advantage of that law, finding that they can settle the patent suit by getting the generic company to agree to stay out of the market for a period of time. Because that generic company also has exclusivity rights, no other generic companies can enter the market.

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$295 Million Would Buy A Lot of T-Shirts

Ken Houghton notes that the first thing anyone learns from Pietra Rivoli’s The Travels of a T-Shirt in the Global Economy: An Economist Examines the Markets, Power, and Politics of World Trade is how pernicious the U.S. subsidy of its cotton industry is.* Now the WTO has discovered the obvious:

American goods will face [$294.7] million in annual sanctions as a result of the United States’ failure to eliminate illegal subsidies to domestic cotton growers, the World Trade Organization ruled Monday.

The NYT attempts to spin this as a loss for the complainants:

The result was disappointing for Brazil, which has won a series of rulings against the United States over the last seven years. The Latin American country had sought to target American goods and drug patents for $2.5 billion worth of economic retaliation.

But gets to the order-of-magnitude-other-way-part a few paragraphs later:

Washington had argued that the award should not exceed $30 million.

So no one is happy, but it’s a start:

“The subsidies paid by the United States to its 25,000 cotton farmers exceed the entire gross national income of virtually every cotton-exporting country in West and Central Africa,” Mr. McGivern said. “Despite several rounds of litigation and ministerial-level negotiations, this issue remains unresolved.”

The cotton case was the first agricultural case started by a developing country in the group’s history.

The issue of generic drugs and trade is dealt with in this Health Affairs piece (of which maybe more later).

Meanwhile, those interested in a certain absurd claim previous dealt with by Susan of Texas (see here and here, for instance) and others, check out this press release from Health Affairs from last week. Good thing those countries don’t have a system that supports pharmaceutical innovation and investment better than the U.S. one.

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