FTC Warns Drugmakers Over Product Hopping

The Federal Trade Commission is taking drugmakers to task for tweaking products to maintain exclusivity and block generic competition, warning the practice — known as product hopping — may violate antitrust laws.

In an amicus brief, filed last week in the Third Circuit appeals court, the FTC says drugmakers can stifle competition by tweaking products and then discouraging use of the older version through tactics such as restricted supply, price increases and flooding doctors with samples of newer versions.

“That shift in prescriptions is generally a one-way street: once doctors prescribe a medicine and find that it works, they are generally reluctant to switch users back to the original formulation even if a cheaper generic version of it later becomes available,” the commission says.

The brief was filed in an appeal of Mylan’s lawsuit accusing Warner Chilcott and Mayne Pharmaceuticals of using the technique to prevent generic competition of their acne medication Doryx. The FTC takes no position on whether Mylan should prevail, but says the lower court failed to understand that generics are unique sources of competition for brandname prescription drugs.

In its lawsuit, Mylan claimed that the brandmakers maintained a monopoly for Doryx (doxyclycline) by suppressing generic competition through three insignificant reformulations involving dosage level or distribution type — capsule or tablet — of the drugs, coupled with efforts to drop the original formulation.

In April, the U.S. District Court for the Eastern District of Pennsylvania ruled that a brandmaker may thwart automatic substitution so long as generics makers remain hypothetically free to pursue new distribution alternatives.

The decision in Mylan Pharmaceuticals v. Warner Chilcott Public Ltd. et al. granted defendants’ motion for summary judgment. — Jonathon Shacat