Thursday, February 19, 2009 4:10 PM

FTC Eyes Aggressive Action On Generic Drugs

By ANNA EDNEY, CongressDaily

During the Bush administration, the FTC faced resistance from the top as it tried to chip away at pharmaceutical deals that kept generic drugs off the market. But now, one commissioner believes the tide is turning under President Obama. In an interview with CongressDaily, FTC Commissioner Jon Leibowitz said he sees momentum building to stop brand pharmaceutical companies from paying off generic drugmakers to delay the availability of their low-cost versions to consumers. In such "pay-for-delay" settlements, brand companies pay generic competitors to keep out of the market. "The new administration does seem to recognize that this is a real problem," said Leibowitz. "This is a real problem for consumers, [and] fixing it... would actually help pay for health care reform." Without naming an exact price tag, he said eliminating the settlements could save consumers and the federal government tens of billions of dollars.

Both brand names and generics back "pay for delay" -- generics are paid millions to do nothing, while brand names make more by maintaining a monopoly for several extra years than they pay out to low-cost competitors -- and they are resisting any overhaul. But FTC is banking on more success with Obama. Leibowitz said the agency is taking a two-pronged approach by challenging the most anti-competitive settlements in court as well as supporting legislation. Until now, FTC has had mixed success in the courts, and it faced opposition from the Justice Department in one of the cases that reached the Supreme Court. He expects the Obama Justice Department, however, "will be much more supportive."

For more on this story, read CongressDailyPM.