Generic Delay Tactics Evolving In Wake Of Consent Decrees – Initial FTC Data
This article was originally published in The Tan Sheet
Executive Summary
Potentially anticompetitive strategies on generics have evolved since the Federal Trade Commission began imposing consent agreements on companies that made questionable settlements, FTC states
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Potentially anticompetitive strategies on generics have evolved since the Federal Trade Commission began imposing consent agreements on companies that made questionable settlements, FTC states. "Some pharmaceutical companies - including both makers of branded drugs and makers of generic drugs - employ potentially anticompetitive strategies involving generic drug applications," FTC Chairman Timothy Muris says in a letter to Sen. John McCain (R-Ariz.) describing several "tentative observations" from FTC's survey on brand/generic competitive practices. "These strategies have evolved following the FTC's announcement of consent orders in our first-generation cases" - those involving settlements between innovator and generic companies, the agency notes. FTC describes cases involving improper "Orange Book" listings as "second generation." The April 30 FTC correspondence was written in response to a recent letter from McCain and the other sponsors of the Greater Access to Affordable Pharmaceuticals Act (S 812/HR 1892) inquiring about FTC's report. The agency's letter discusses preliminary findings based on its initial review of the data. The letter notes FTC's "first generation" litigation involved interim patent agreements under which the brand name company paid the generic firm and in exchange the generic company agreed to not bring a drug to market until litigation was resolved. Initial review of the data suggests these types of agreements now are relatively rare, FTC states. "Interim patent agreements between name-brand drug and generic drug makers - as used in our two initial first-generation cases - appear to be uncommon," the agency's letter says. "Most agreements instead have produced final resolution of the patent litigation at issue." FTC's initial review of the data suggests that the majority of patents that lead to patent infringement cases are formulation and method of use patents, rather than patents covering the active ingredients contained in the drug product at issue. Muris told an April 23 Senate Commerce Committee hearing on generic drugs that most patent challenges do not involve active ingredient patents. FTC also noted that FDA has "increased substantially" the number of 180-day exclusivity periods for generics since the 1998 Mova decision. The ruling established that the first company to file an ANDA is eligible for 180 days, rather than the first company to win a patent challenge. FTC expects to release its survey this summer, about half a year behind schedule because of the volume and timing of materials it received from the 90 companies contacted. The commission notes that it began serving orders for documents on April 25, 2001. "Although we had hoped to complete the study by the end of calendar 2001, we did not receive much of the responsive material - including approximately 100 boxes of documents - until Dec. 15, 2001," FTC maintains. FTC proposed the study of generic competition in October 2000 (1 (Also see "FTC Generic Drug Survey To Gather Information On Late-Listed Patents" - Pink Sheet, 16 Oct, 2000.), p. 13). "We are still waiting for follow-up information from several companies, based on the information they had previously submitted," the commission notes. Release of the commission's report is seen as important to sustaining momentum for reforms of the FDA generic approval process. At a May 8 Senate Health Committee, Rep. Henry Waxman (D-Calif.) and Sen. Orrin Hatch (R-Utah) outlined disparate strategies for reform (see 2 (Also see "Three-Year Exclusivity Questioned By Sen. Edwards, GPHA’s Jaeger" - Pink Sheet, 13 May, 2002.) ). The commission recently has been asked by Sen. Charles Schumer (D-N.Y.), cosponsor of the McCain/Schumer generic bill, to begin another investigation of industry tactics that may discourage use of generics. In a May 6 letter to Muris, Schumer asks the agency to investigate manufacturer/pharmacy deals under which pharmacies send letters to patients encouraging them to switch to newer, more expensive drugs. |