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FTC charges drug makers with alleged deal to keep generic drugs off market

Monday, April 2, 2001

FTC charges drug makers with alleged deal to keep generic drugs off market

WASHINGTON, D.C. — The Federal Trade Commission (FTC) today charged three drug makers with entering into anticompetitive agreements aimed at keeping low-cost generic drugs off the market.
The FTC alleges that the maker of a brand-name drug illegally paid two generic drug manufacturers to induce them to delay launching their generic versions of the drug beyond any delay they might have agreed to without such payments. The FTC said that the alleged agreements cost consumers more than $100 million.
This is the third complaint the FTC has brought in the past year alleging illegal agreements between brand-name and generic pharmaceutical manufacturers. The FTC said that of the previous two cases, one has been settled and the other was scheduled for trial but has been withdrawn to consider a settlement.
Janell Mayo Duncan, Legislative Counsel for Consumers Union, made the following statement today regarding the issue:
“We applaud the FTC’s efforts to stop drug makers from keeping less-expensive generic drugs off the market. If these latest allegations are true, it amounts to a brand-name drug company manipulating the law to prevent competition.
“When brand-name drug companies delay the entry of generic drugs into the market, they rob consumers of billions in savings. Congress should close the loopholes that allow drug companies to game the system. For instance, the first company to seek government approval of a generic drug receives 180 days from the time it begins marketing the drug during which other companies cannot get approval for competing drugs. The brand-name company can conspire with the generic maker to postpone marketing of the drug indefinitely. A brand-name company can also hold up government approval of a generic drug for 30 months simply by filing a patent infringement suit, regardless of what the merits of the suit might be. Congress should streamline the process or do away with these delays altogether.
“The Healthcare Financing Administration says spending for prescription drugs is growing faster than any other category of healthcare expenditure. More competition from generic drugs is one way to take some of the sting out of skyrocketing drug prices. While we wait for Congress to tackle the systematic problems of drug pricing, increasing generic drug competition can at least provide consumers some semblance of relief.”
For more information contact:
David Butler – (202) 462-6262