Two Generic Makers Agree to Settle FTC Charges that They Colluded to Prevent Competition
Generic drug makers Biovail Corp. and Elan Corp. have agreed to settle FTC charges that they brokered a deal that prevented competition and lower market prices for a generic version of Bayer AG's blood pressure medication Adalat, the AP/Nando Times reports (Ho, AP/Nando Times, 6/27). Biovail and Elan are the only two firms that have been approved to market the generic version of Adalat, called nifedipine (Day, New York Times, 6/28). Each company received approval to market both the 30-milligram and 60-milligram dosages of nifedipine, but Elan never marketed its 60-milligram pill and Biovail never marketed its 30-milligram pill. The FTC charges that the two companies made this arrangement in order to give each other monopolies over the two version of the medicine (FTC release, 6/27). According to the FTC, the firms agreed to share profits from drug sales and royalty payments. Although the two companies have released statements saying that the deal was legal, "pro-competitive" and "saved consumers millions of dollars," they agreed to end the arrangement under the terms of the settlement (AP/Nando Times, 6/27). The settlement also stipulates that the two drug makers must begin to produce and market nifedipine separately. The New York Times reports that the settlement is the first instance in which the FTC has taken anticompetitive action against two generic drug makers. "This really shows that we're not just picking on the branded manufacturer. We're trying to protect competition throughout the drug industry," Joe Simons, director of the FTC's bureau of competition, said (New York Times, 6/28). The settlement is subject to public comment for 30 days before it becomes final (AP/Nando Times, 6/27).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.