Ban Sought on Delays to Availability of Generics

The Federal Trade Commission on Wednesday at a hearing of the Senate Judiciary Committee asked lawmakers to take action to prevent agreements in which brand-name pharmaceutical companies pay generic pharmaceutical companies to delay market entry of their products, the AP/Richmond Times-Dispatch reports (AP/Richmond Times-Dispatch, 1/18).

The agreements involve "a provision of the 1984 Hatch-Waxman legislation ... meant to encourage generic drug makers to challenge invalid or narrow patents on brand-name drugs," CQ HealthBeat reports. Under the provision, the first generic pharmaceutical company to challenge successfully a patent on a brand-name medication receives six months of market exclusivity for a generic version of the treatment (Reichard, CQ HealthBeat, 1/17).

FTC since the late 1990s had blocked the agreements. However, in late 2005, the U.S. Court of Appeals for the 11th Circuit ruled that FTC officials exceeded their authority when they blocked an agreement between Schering-Plough and Upsher-Smith Laboratories over K-Dur 20, a treatment for hypertension and congestive heart disease. FTC filed an appeal with the Supreme Court, but the court declined to hear the case without comment (American Health Line, 10/31/06).

At the hearing, FTC Commissioner Jon Leibowitz testified that the courts have taken "an extremely lenient view" of the agreements. As a result, half of the 28 settlements in patent disputes between brand-name pharmaceutical companies and generic pharmaceutical companies in fiscal year 2006 involved the agreements, according to Leibowitz (CQ HealthBeat, 1/17). He said, "Such settlements restrict competition at the expense of consumers, whose access to lower-priced generic drugs is delayed, sometimes for years" (Newark Star-Ledger, 1/18).

At the hearing, committee Chair Patrick Leahy (D-Vt.) announced a bill that would bar the agreements. Supporters of the legislation include Sens. Chuck Grassley (R-Iowa), Russ Feingold (D-Wis.), Herb Kohl (D-Wis.) and Charles Schumer (D-N.Y.) (CQ HealthBeat, 1/17).

FTC officials said that the commission "strongly supports" the bill (Bloomberg/Winston-Salem Journal, 1/18).

According to Leahy, the agreements amount to "collusion that limits consumer choices and keeps consumer prices artificially high." Leahy said, "Congress never intended for brand-name drug companies to be able to pay off generic companies not to produce generic medicines. That would be a shame, harmful to consumers, and a crime" (Newark Star-Ledger, 1/18).