The FTC plans to investigate the competitive effects that authorized generics
are having on the drug industry, yet another sign that the agency is taking
a harder line against potentially anticompetitive deals between drugmakers.
Sens. Chuck Grassley (R-Iowa), Patrick Leahy (D-Vt.) and Jay Rockefeller (D-W.Va.),
who requested the FTC study in May, announced the FTC's decision.
According to the senators, the commission's study will look into the circumstances under which innovator companies launch authorized generics; how competition between Paragraph IV generics and authorized generics during the six-month exclusivity period has affected short-term price competition, as well as long-term prospects for entry by Paragraph IV generics; and how generic drug entry affects prescription drug prices.
Generic Pharmaceutical Association President and CEO Kathleen Jaeger applauded the FTC's decision, saying, "This study puts us one step closer to closing the unintended loophole that has allowed these products to infiltrate the health care system."
The senators who requested the study raised concerns in a May 9 letter to the FTC that authorized generics "could have a negative impact on competition for both blockbuster and smaller drugs, because the generic industry would be less inclined to invest in their production," and that "prices for certain drugs would remain high for consumers."
The FTC has taken a number of actions in recent months to crack down on anticompetitive activities in the pharmaceutical industry. Earlier this week, the agency filed an antitrust suit against Barr Laboratories and Warner Chilcott, seeking to nullify an agreement that the FTC claims unfairly keeps a cheaper generic version of Warner Chilcott's contraceptive Ovcon (ethinyl estradiol/norethindrone) off the market. The FTC has also petitioned the U.S. Supreme Court to hear a similar antitrust case against Schering-Plough and Upsher Smith.