04/04/2013 01:22 pm ET

Adderall Lawsuit Alleges Shire Pharmaceuticals Inflated Drug's Price

The company that makes Adderall was artificially inflating the price of the drug for years by trying to keep generic versions off the market, a new lawsuit claims.

A class-action suit filed on behalf of California Adderall alleges Shire Pharmaceuticals, the maker of AXR, or Adderall, used a combination of anti-competitive practices to delay the introduction of a generic version of the drug. The result, according to the suit: consumers were forced to buy the “far more expensive” name-brand Adderall, a drug of choice for patients suffering from attention-deficit hyperactivity disorder.

Shire stands accused of filing “sham” patent litigation to delay other companies from introducing their own versions of Adderall until 2006. Shire then reached settlements with some of those companies, which allowed the firms to introduce an “authorized generic” version of the drug after three more years, in 2009, in exchange for a royalty payment. But the lawsuit claims Shire reneged on the deals by not providing the companies with enough of the product to meet demand, forcing consumers to continue to buy Adderall at inflated prices.

Gwen Fisher, a Shire spokeswoman, told The Huffington Post that the lawsuit’s allegations are “absolutely not true.” She noted that the deals with other drugmakers allowed for a generic version of Adderall to reach the market earlier than had those companies waited for FDA approval. The first unauthorized generic version of Adderall was approved by the FDA in 2012.

Fisher added the company plans to “defend itself vigorously” in the case. “Shire believes that the lawsuits have little merit,” she wrote in emailed statement, pointing to an antitrust suit against the company in New York federal court that was thrown out in March.

Once the generic version of Adderall hit the market last year, Shire’s bottom line also took a hit. According to Bloomberg, the company's sales of Adderall dropped 35 percent to $82 million in the fourth quarter of 2012 -- a period not covered by the class-action suit.

Though they may seem unfair, many the tactics Shire allegedly used to decrease competition aren’t illegal, and they’re rather common in the pharmaceutical industry. So-called “pay for delay” deals between drugmakers cost consumers and taxpayers $3.5 billion a year, according to the Federal Trade Commission. The Senate is mulling legislation that would ban the practice, which the pharmaceutical industry prefers to call “reverse settlements,” and the Supreme Court is also weighing a case over one such deal.

Opponents of the deals argue that they violate antitrust laws because drugmakers can come up with a settlement that benefits them but hurts consumers by keeping cheaper versions of drugs off the market.


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