FTC Presses For An End To ‘Pay-To-Delay’ Deals
Posted: 13 Jan 2010 05:27 AM PST
In his never-ending quest, FTC commish Jon Leibowitz will hold a press conference today to ask Congress to include a provision in the health care reform bill to end deals in which brand-name drugmakers offer payments or other inducments to generic rivals to delay copycat versions of best-selling meds. He’ll be appearing at the Rayburn House Office Building in Washington, DC, at 12:30 along with several members of the House, which has already included a ban in its own bill.
The Congressional Budget Office, you may recall, recently estimated that the House provision could save the government $1.8 billion in health costs over the next 10 years (see here). The Senate version does not include a ban (see here), although nine Democrats last month sent a letter to majority leader Harry Reid to include this in the final version of legislation.
“These sweetheart deals are being done on the backs of consumers,” Leibowitz tells The New York Times. “From the perspective of the Federal Trade Commission, these deals are one of the worst abuses across the board in health care and should be stopped.”
As the chart shows, drugmakers struck 19 deals in fiscal year 2009 that involved both delaying generic entry and compensation from given generic makers, that’s up from zero in fiscal year 2004, according to an FTC report. Settlement deals in which generic makers received compensation typically kept generics off the market for 17 months longer than deals without payments, the FTC found.
One famous case involves Cephalon’s Provigil pill for narcolepsy. In late 2005, the drugmaker struck deals with several generic makers that challenged the Provigil patent. Cephalon settled the lawsuit by paying them $200 million and allowing product launches several years before the patent expiration, suggesting consumers would get access to cheaper generics before the patent expired.
The FTC is challenging the settlement by arguing Cephalon’s payments bought it market exclusivity and that if patent challenges prevailed, consumers may have had access to lower-cost generics sooner, the Times notes (background). Cephalon’s general counsel, Gerald Pappert, tells the Times that Cephalon structured the deals to comply with the law and that the agreements allowed generics to enter the market in 2012, three years earlier than the Provigil patent was due to expire. |
