Drug Firms Reap Billions by Paying Rivals: Critics

Sharp overnight increases in the cost of prescription drugs are not the only pharmaceutical industry practice that adds billions of dollars to the price that consumers pay for their medicines.

Pharmaceutical companies also use "reverse settlement payments," or "pay-to-delay" deals, financial arrangements that allow drug manufacturers in some instances to pay competitors not to manufacture generic versions of their products, thereby ensuring that they maintain patent protection for as long as possible, NBC News reported.

Critics say that unlike the steep drug price increases that have received wide media attention, reverse settlements have drawn little scrutiny.

Regulators and courts are struggling to figure out when the agreements cross the murky legal line laid down by the U.S. Supreme Court two years ago. But in the meantime, the deals have cost consumers billions of dollars over the past 22 years, according to a 2009 study of the practice.

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