GENERIC DRUGS: FTC Probes Drugmakers’ Patent Settlements

Concerned that some "brand-name companies are paying off generic companies after suing them for patent infringement," USA Today reports that the Federal Trade Commission is investigating at least four deals they think "may be stealing some of the promise of cheap, widely available generic drugs." Under investigation are:

Zeneca Pharmaceuticals: Authorities are questioning Zeneca's deal with Barr Laboratories over the breast cancer drug tamoxifen. The "settlement" gave Barr exclusive rights to distribute a generic version of the drug manufactured by Zeneca.
Abbott Laboratories: To settle a patent lawsuit over the blood pressure medication Hytrin, Abbott paid Ivax Pharmaceuticals $24 million and Geneva Pharmaceuticals an undisclosed amount until a generic version went to market.
Eli Lilly: In a deal that some say extends its patent, Eli Lilly paid Sepracor $70 million in cash and gave them a $20 million contract to develop a "purified form of Prozac."
Hoechst Marion Roussel: The company paid Andrx $100 million to keep a generic version of the heart medication Cardizem CD off the shelf.

While some say the government is "going too far" with its investigations, others contend that the deals are questionable. Viren Mehta, an industry analyst, said, "There should be certain limits to a business' right to do everything legally possible to protect its franchise." Antitrust attorney George Cary said the deals are "like getting run over by a car, suing the guy that hit you and then paying him and saying you settled the lawsuit." But former FTC attorney Marc Schildkraut argued that "it is asking too much to suggest drugmakers can't settle under these circumstances. Companies can't be expected to pay for lengthy trials to vindicate the rights of all citizens" (O'Donnell, 9/30). 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.