FTC Commissioner Thinks Obama Administration Will Help Stop Agreements To Delay Generics

Main Category: Pharma Industry / Biotech Industry
Also Included In: Public Health
Article Date: 24 Feb 2009 - 1:00 PDT

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Federal Trade Commission Commissioner Jon Leibowitz said he believes the Obama administration will do more to stop brand-name pharmaceutical companies from paying generic drugmakers to delay bringing lower-cost versions of medications to the market, CongressDaily reports. Under so-called "pay-for-delay" settlements, both parties benefit because the generic companies are paid to do nothing while brand name drugmakers make more money for longer periods of time by "maintaining a monopoly for several extra years," according to CongressDaily.

Leibowitz said, "The new administration does seem to recognize that this is a real problem." He added that "fixing it ... would actually help pay for health care reform." Leibowitz said FTC will take a two-pronged approach to stopping "pay-for-delay" settlements. First, the agency will challenge the most anti-competitive settlements in court, and secondly, it will support legislation against such deals. Leibowitz said he expects the Obama Department of Justice to be "much more supportive" of legal challenges to the settlements than the Bush administration. He added that it also is possible "the-pay-for delay settlement issue or problem will get resolved in health care reform, and ... if that happens, then it will presumably get resolved more expeditiously."

Sens. Herb Kohl (D-Wis.) and Chuck Grassley (R-Iowa) earlier this month reintroduced legislation that would prohibit the settlements. House Energy and Commerce Chair Henry Waxman (D-Calif.) plans to reintroduce the House version of the legislation soon, Leibowitz said.

FTC also is set to release a report examining the relationship between authorized generics and "pay-for-delay" settlements. Authorized generics are generic versions of brand-name drugs authorized that can be brought to market even during the six-month exclusivity period for generic drug manufacturers. According to CongressDaily, brand companies are promising generic drugmakers that they will not bring an authorized generic to market during the exclusivity period if the generic manufacturer agrees to wait several years before making its drug available (Edney, CongressDaily, 2/19).

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