FTC Receives Approval to Investigate Generic Drug Deals
The Bush administration has approved a federal investigation of whether drug makers have engaged in anti-competitive practices, specifically targeting agreements to settle patent disputes between brand-name drug makers and generic drug manufacturers, Reuters/Los Angeles Times reports. Under the industry-wide investigation, announced by Federal Trade Commission Chair Robert Pitofsky last October, the FTC will examine whether the drug companies "manipulated provisions of the drug-patent law to delay the marketing of generic drugs," Reuters/Times reports. The FTC maintains that such deals "cost consumers hundreds of millions of dollars." Over the next five years, the FTC estimates that brand-name drugs accounting for $20 billion in U.S. sales will lose their patent protection. Since last year, the FTC has filed three complaints involving seven drug makers, alleging that brand-name drug makers paid their generic competitors to prevent lower-priced drugs from entering the market. Most recently, the agency filed a complaint against Schering-Plough Corp., American Home Products Corp.'s Lederle unit and Upsher-Smith Laboratories. Approval from the Office of Management and Budget was the "final hurdle" the FTC had to overcome to proceed with the industry-wide investigation. Some Washington, D.C., lawyers did not expect the OMB, with former Eli Lilly & Co. executive Mitch Daniels at the helm, to approve the investigation. With OMB approval, the FTC anticipates serving subpeonas to 90 U.S. drug companies. President Bush has said that he intends to replace Pitofsky with "conservative anti-trust attorney Timothy Muris," likely later this spring (Kaplan, Los Angeles Times, 4/18).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.