The trillion-dollar drug industry operates on a grand bargain. If you invent a wonder pill, you get a patent and thus a monopoly. The catch is that the patent must one day expire, opening the door to cheap generics and forcing inventors back to the well to start the cycle all over again.

But it can be quite hard to say goodbye to a monopoly and the riches it brings. And so drug companies tend to get creative in the waning days of patent exclusivity, stretching the law to translucent lengths in the name of protecting profits. That became quite evident (again) last week, when Allergan (AGN) surprised the pharma world by announcing it had sold patent rights on a lucrative eye drug to a Native American tribe to avoid facing certain legal challenges by generics.

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  • These are only the top 5. The are many other ways – legal and illegal – that Big Pharma evades the law to protect its phony Blockbusters. “Orphan Drug” status for decades-old drugs is not just used by the Martin Shkrelis – ALL the Big Boys have used it too. It is the most corrupt industry in the world.

    • Observer, you forgot the one where we sell placebos to mentally ill patients to save money, since sugar pills work just as well as some psych drugs. And how about the one where we take the pills retrieved through our drug take back programs extract the active ingredients and recycle them into new pills to sell. The inactive ingredients are also put to great use. We extract the food coloring used in the capsule dyes. Did you ever wonder how the your J-E-L-L-O got its color?

  • Life cycle management is not a “trick”. The specialty pharma company I worked for used extended release as a business model, and we eventially sold the company to big Pharma in 2007 for seven figures. So if this model is a “trick” strategy, somebody hasn’t gotten the word.

    Also your statement is factually incorrect about modified release forms getting an extra decade of patent life. It is only three years, and the doctor is free to prescribe the IR form after the patent expires, no matter whether it is branded or generic.

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