Pharma: Blocking New Entrants After Patent Expiration

This is from an excellent economist article about how some big pharma companies are blocking new entrants:

Basically, it comes down to two approaches:
1) Settling with the generic company in such a way that they don't bring their product to market right away.
2) Releasing your own generics so that you can capture the 6 month monopoly period and thus distort the economics behind other generics entering.

####
The best way out for the established drugs industry would be to find lots of clever new blockbusters to replace the ones going off-patent. But as the industry's sagging share valuations suggest, the new-drugs pipelines at big firms have run dry. So their managers are relying on two controversial new strategies. First, they are settling the lawsuits brought by generics firms, sometimes paying them to delay launching cheap pills. Novartis, a big Swiss firm, recently made a private settlement for Dr Reddy's to drop a lawsuit in return for the Indian firm delaying the launch of a generic rival to Exelon, its Alzheimer's remedy. This month it emerged that GlaxoSmithKline (GSK), a big British pharmaceutical firm, has also settled a patent lawsuit with Ranbaxy concerning the generics firm's launch of a cheap version of Imitrex, GSK's migraine reliever.

Under American laws designed to encourage generic drugs, which save money for patients, the first generic maker to win regulatory approval for its version of any given branded drug is supposed to enjoy a six-month monopoly. This promised pot of gold was designed to support small generics firms—but Big Pharma has found a loophole. It is pre-emptively launching generic versions of its own branded pills, which wipes out those six months of monopoly profits and undermines the economics of generics firms.
####