FTC says 'pay-for-delay' contracts between drug makers hurt consumers

[JURIST] Drug companies are harming consumers by using "pay-for-delay" legal agreements to keep cheaper generic prescription drugs off the market, according to a report [PDF text; press release] released Wednesday by the US Federal Trade Commission (FTC) [official website]. The report compares legal documents submitted to the FTC by drug manufacturers in fiscal year 2007 with those submitted since fiscal year 2004, finding an increasing use of "pay-for-delay" agreements between branded and generic drug manufacturers. AP has more.

"Pay-for-delay" agreements involve deals by which generic drug manufacturers seeking to market a generic version of a branded product are compensated by the branded drug manufacturer in return for delaying the entry of the generic product onto the open pharmaceutical market. In January, FTC Commissioner Jon Leibowitz [official profile] testified [transcript] before the Senate Judiciary Committee in support of Congressional legislation to ban the practice, saying that it may violate antitrust [JURIST news archive] law. In 2003, Congress passed the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 [PDF text] which requires that certain legal agreements between branded and generic drug manufacturers executed after January 7, 2004 be submitted [FTC backgrounder, PDF] to the FTC for review within ten days of execution.



 

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