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US regulator to tighten scrutiny on potential drug delay deals

June 24, 2014
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The U.S. Federal Trade Commission (FTC) has announced plans to increase probes into pharmaceutical deals that potentially harm competition by delaying the launch of generic drugs on the market, Bloomberg reported.

Several new investigations have been launched by FTC inspectors, looking into agreements between generic drug manufacturers and brand-name pharmaceutical companies. If the probes reveal that the deals are in violation of competition laws, the agency may start lawsuits on grounds of disgorgement of revenues, Markus Meier, head of the FTC's healthcare division, told Bloomberg. The FTC will try to put a stop to this practice with every means available, he added.

In June 2013 a U.S. Supreme Court ruling banned deals between brand-name pharmaceutical companies and generic drug companies, where the former paid the latter to put off the launch of their alternative versions of brand-name drugs. Such deals prevented consumers from having access to more affordable drug products, which sometimes cut healthcare costs by up to 80 percent.

According to the FTC, deals that result in such delays cost U.S. consumers an average of $3.5 billion annually. Citing the most recent data, which covers the 12 months to September 2012, the agency recorded 40 deals involving 31 brand-name companies and products with combined sales of $8.3 billion.

According to industry experts, the court ruling has not stopped companies from entering into such agreements as they have only become more creative and resourceful in masking pay-for-delay compensation.

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