FTC Accuses Brand-Name Drug Manufacturers of Preventing Generics from Reaching the Market
Federal Trade Commission Chair Timothy Muris yesterday said that brand-name drug companies have used "illegal tactics" to delay the introduction of generic competition to the market, "depriving consumers of the benefits of less expensive generic drugs," the New York Times reports. Muris yesterday told members of the Senate Commerce, Science and Transportation Committee that many brand-name pharmaceutical companies have "improperly" filed applications for patent extensions with the FDA to delay generic competition, "costing consumers millions or even billions of dollars without valid cause." According to Muris, the FDA has neither the "resources nor the expertise" to review patent extension applications from brand-name drug companies. In addition, he said that a number of brand-name drug companies have filed lawsuits against generic drug makers that can delay generic competition for up to 30 months, regardless of the merits of the litigation (Pear, New York Times, 4/24). Muris added that some brand-name drug makers have paid generic drug companies not to market generic versions of their treatments (MacDonald, Hartford Courant, 4/24). He said that the FTC has "dramatically increased" investigations into the health care industry, including pharmaceutical companies (Harris/Adams, Wall Street Journal, 4/24). The FTC has requested a 50% increase in the agency's budget for health care industry investigations, which Muris said "would be enough funding to pursue these cases vigorously" (Fulton, CongressDaily, 4/23).
Muris announced at the hearing yesterday that the FTC has reached a consent agreement with Biovail Corp., a Canadian drug maker, over the company's "attempts to use ancillary patent filings to delay generic competition" against the hypertension drug Tiazac (Wall Street Journal, 4/24). The FTC had accused Biovail of "illegal monopolization" that violated federal antitrust laws and "deprived consumers of the benefits of lower-priced generic competition" (New York Times, 4/24). Under the consent agreement, Biovail promised to surrender part of the company's exclusive license to the patent on Tiazac and not to file additional applications for patent extensions with the FDA (Wall Street Journal, 4/24). In addition, Biovail agreed to drop a lawsuit against Andrx Pharmaceuticals, a Florida drug maker that has sought to market a generic version of Tiazac. Biovail admitted no wrongdoing under the agreement and did not have to pay a fine (New York Times, 4/24). Joe Simmons, director of the bureau of competition at the FTC, said that the agency would take similar actions against other drug companies in the future (Wall Street Journal, 4/24).
At the hearing yesterday, some lawmakers said that they hope to pass a bill (S 812) introduced by Sens. John McCain (R-Ariz.) and Charles Schumer (D-N.Y.) last year to reform federal prescription drug patent laws and provide patients with "swifter access" to generic treatments. Schumer said the abuse of patents by brand-name drug companies has become an "epidemic" that has cost patients, employers and health insurers millions of dollars per week (New York Times, 4/24). "There are a number of loopholes in the patent laws which drug companies exploit every day to block their low-cost competitors from breaking into the marketplace," Schumer said (Congressional Quarterly, 4/23). Sen. Byron Dorgan (D-N.D.) added that increased access to generic drugs could save patients $8 billion to $10 billion per year (Hartford Courant, 4/24). According to New Hampshire Gov. Jeannne Shaheen (D), who also testified at the hearing, "loopholes" in drug patent laws have forced state governments, employers and seniors to "spend hundreds of millions of dollars unnecessarily on brand-name prescription drugs" (Brubaker, Washington Post, 4/24). Generic Pharmaceutical Association President and CEO Karen Jaeger added that reforms to drug patent laws would "encourage the brand industry to refocus its resources on true product innovation, rather than devoting those resources to legal maneuverings designed solely to extend monopoly protection on existing products" (CongressDaily, 4/23). However, Gregory Glover, an attorney for the Pharmaceutical Research and Manufacturers of America, said that reforms to drug patent laws would result in "less innovation, fewer new drugs for generics to copy and, more important, fewer new drugs to enhance treatment for patients" (Washington Post, 4/24).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.