FTC recommends limits on delaying generic drugs

Tuesday, July 30th 2002, 12:00 am
By: News On 6

WASHINGTON (AP) _ The Federal Trade Commission wants to limit the ability of drug companies to delay the marketing of generic competitors and to require the firms to disclose agreements covering the sales of generic drugs.

``The commission's recommendations today are designed to accomplish two goals: to facilitate generic entry and to maintain appropriate incentives for the development of new drug products,'' said FTC chairman Timothy J. Muris.

American consumers benefit from both innovation in drugs and the marketing of generic versions, he noted.

The Generic Pharmaceutical Association welcomed the report, saying it confirms the need for new legislation. Pharmaceutical Research and Manufacturers of America, which represents brand-name firms, noted that while the report recommends some changes it does not include more extensive proposals that some have suggested.

The report issued Tuesday stems from a study of whether pharmaceutical companies keep lower-cost generics off the market.

When a generic is approved for sale by the Food and Drug Administration, the first company to market it is allowed 180 days of sales before another competitor is approved. The FTC has expressed concerns that brand-name companies either make payments to the generic company to delay marketing, or make some other agreement to ``park'' those sales for a time.

The FTC has filed complaints against drug-makers for allegedly entering into agreements that effectively stopped generic forms of brand-name drugs from coming to market.

However, in one case earlier this month, an administrative judge dismissed the agency's complaint that alleged pharmaceutical giant Schering-Plough Corp. conspired with Upsher-Smith Laboratories to keep a generic drug off the market.

In that case, the FTC alleged that Schering, the maker of K-Dur 20, a widely prescribed potassium chloride supplement, paid Upsher-Smith millions of dollars to delay the sale of a cheaper, generic version of the drug.

But D. Michael Chappell, an FTC administrative law judge, said in his ruling that the ``violations alleged in the (FTC) complaint have not been proven.''

In the report issued Tuesday, the FTC recommended legislation requiring that brand-name companies and the first generic applicant to sell a drug provide it with copies of any agreements they make.

The agency also recommended that brand-name companies not be allowed more than one 30-month delay of a generic competitor through filing a patent infringement lawsuit.

Such suits generate an automatic delay of up to 30 months and once that has expired there have been cases of brand-name drug makers filing a second suit on a different issue.

The agency said eight generic drugs have been delayed through this tactic, six since 1998. In each of four cases that have been ruled on, the agency said, the court has found the patent claim invalid or not infringed.

Nonetheless, the suit had the effect of delaying the sales of the cheaper drug, the agency said.

Over the next few years, drugs with nearly $20 billion in annual sales in the United States will go off-patent.

``The FTC report found that multiple 30-month stays have prevented FDA approval of generic applicants' (drugs) up to 40 months beyond the initial 30-month period. Reforming this loophole ... is critical to creating savings for American consumers,'' said Kathleen D. Jaeger, president of the Generic Pharmaceutical Association.