Last Tuesday, a US House of Representatives subcommittee held a hearing on the deals pharmaceutical companies strike with one another to delay generic drugs from reaching the market. In these deals, a company wishing to continue making a profit from its brand-name drug pays another firm to refrain from selling a generic version.

These deals undoubtedly hurt consumers’ pocketbooks. According to the House subcommittee hearing, such deals made between 1993 and 2008 have cost US consumers at least $12 billion annually. It’s no wonder the Obama administration wants to stop these deals. Democrats in Congress have recently introduced legislation in both the House and the Senate that would make such deals illegal.

I don’t think consumers should bear the brunt of funding the R&D of pharmaceutical companies. However, if profits from drug patents are curtailed, companies might have less cash to invest in riskier research that could lead to the development of new types of drugs. This, in turn, could reduce the number of drugs available to consumers. What do you think can be done to provide consumers with reasonably priced drugs and keep money flowing to R&D at the same time?

Photo by klynslis