Battle brews over
I READ A COUPLE OF STORIES recently on ques- Consumer groups and privacy advocates are
tionable tactics drug companies are using to protect urging taxpayers who oppose the changes to contact
their patents and brand names, preventing more- the IRS and their representatives in Congress.
affordable generic drugs from being marketed.
First, a major drug maker agreed to pay $14 mil- New rates cost an arm and a leg
lion to settle a multistate action claiming that it Millions of Americans who over the past four
blocked the manufacture of generic versions of its years stretched themselves too far financially to buy
major seller, an antidepressant medication. The states homes could lose them, as monthly payments on
argued that keeping generic drugs off the market adjustable-rate mortgages (ARMs) get higher.
forced consumers to pay higher prices for the widely Several years ago, when interest rates bottomed
prescribed drug. out, lenders relaxed their standards by offering cre-
Then, the Federal Trade Commission (FTC) ative financing to man y who could
announced plans to subpoena some 200 pharma- nothave otherwise qualified for home
ceutical companies to investigate other alleged anti- loans. But now, as initial “low inter-competitive marketing practices. At issue is whether est” periods are running out on
pharmaceutical companies are blocking competi- many of these ARMs, borrowers are
tion by releasing generic copies of their own brand- facing “resets” of their interest rates.
name drugs to coincide with the debut of generics The result is a jump in monthly
made by competitors. payments between 10 percent
Federal law allows a generic-pharmaceutical and 50percent.
company to challenge a patent held by a brand- Some homeowners
name manufacturer. If successful, they have six willbeabletorefinanceto
months of exclusivity during which they can market a better 15- or 30-year fixed-their new product without competition. Afterward, rate loan. But many others
other manufacturers can seek approval for their own will have difficulty meet-generic versions, further increasing competition. ing the higher payments.
But a loophole in the law allows the original A recent study by
branded company to authorize their own generic First American Real
versions, which increasingly enter the market at the Estate Solutions pro-start of the supposed six-month exclusivity period jects about one in eight
that generic challengers rely on. households with ARMs
The FTC plans to examine whether this loop- that originated in 2004
hole can unfairly benefit brand-name companies in and 2005 could possi-the long run. Whatever is decided can greatly affect bly default on those loans.
consumer prices for generic prescription drugs. To prevent higher
Is your tax information private? regulators are pushing
In a move that may threaten the privacy of tax- lenders to tighten their
payers, the Internal Revenue Service (IRS) is propos- lending standards, which
ing that accountants and other tax preparers may could make it more diffi-sell information from tax returns to marketers and cult for many to qualify
data brokers. for refinancing. C
I RECEIVED a letter from
a national department
store saying that as a
they’d issue me a special
credit card within one
month, unless I called
and canceled within two
weeks. The thing is, I
don’t shop at that store.
I called the “opt out”
number, and before they
canceled the offer they
put me through a verification process that
included asking all sorts
of confidential information. This sounded really
suspicious to me!
DALEY, your instincts
are sharp. This could
be a ploy by an ID
thief. Or, it could
be an affiliate
of a credit-card
got your name
from a database
which is legal if
you did not opt
out of informa-
tion disclosure with
your current credit-
One option is to
ask the rep if they are
verifying data they
already have and, if
so, to read you a por-
tion of the data they are
requesting, such as the
last two digits of your
Social Security number.
But you should contact
the department store
directly and let them
know your objections to
this marketing campaign.
The IRS says the changes are housecleaning AMY CAN TRELL
measures needed to update outmoded regulations David Horowitz is a leading consumer advocate.
adopted before it began accepting electronic returns. His “Fight Back!” commentaries are heard daily on
Critics call it an invasion of privacy for profit. the Jones Radio Network. For stations and times,
Current IRS rules now prohibit the sale of tax check the radio page at
returns to third parties for marketing purposes. The © 2006 FIGH T BACK! INC. ALL RIGH TS RESERVED.
new proposal would allow a tax preparer to sell information, or even an entire return, by obtaining written consent from a client. Do you have a question for David?
However, critics say the requirement for signed Just log on to
www.fightback.com and “Ask David.” He will personally respond to
consent would prove meaningless for many taxpay- your problem if you follow the instructions printed on his Web site. (Costco members
ers, who may unwittingly sign such a consent form receive a rebate off the normal fee.) Questions and answers of the greatest interest to
if it’s included in the stacks of documents presented Costco members will be used in this column with the permission of the contributor
to them before filing. and will be posted on