FTC finds generics makers paid to drop patent challenges

May 1, 2006

Following two federal appeals court rulings last year that rejectedFTC actions that had prevented brand-name companies from payingtheir rivals to drop patent challenges, an FTC analysis has foundat least seven agreements made in fiscal 2006 and three in 2005between brand-name drug companies and generic companies. Speakingto the In-House Counsel's Forum on Pharmaceutical Antitrust, FTCcommissioner Jon Leibowitz said that if the appeals court decisionsremain in force, rival drugmakers will have "carte blanche to avoidcompetition and share resulting profits.

Following two federal appeals court rulings last year that rejected FTC actions that had prevented brand-name companies from paying their rivals to drop patent challenges, an FTC analysis has found at least seven agreements made in fiscal 2006 and three in 2005 between brand-name drug companies and generic companies. Speaking to the In-House Counsel's Forum on Pharmaceutical Antitrust, FTC commissioner Jon Leibowitz said that if the appeals court decisions remain in force, rival drugmakers will have "carte blanche to avoid competition and share resulting profits." In addition, Leibowitz said the commission has agreed to ask the Supreme Court to overturn one of the lower-court decisions.

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