In its latest effort to thwart pay-to-delay deals, the US Federal Trade Commission filed a lawsuit on Wednesday against Endo Pharmaceuticals and three other drug makers for allegedly paying generic rivals to delay launches of copycat versions of two painkillers. This is the first lawsuit, however, in which the agency argues that a deal involving a so-called authorized generic thwarted competition.
In pay-to-delay deals, a brand-name drug maker settles a patent lawsuit by paying cash or transferring something else of value to a generic rival, which agrees to delay launching a copycat medicine. In 2012, the US Supreme Court ruled the deals may be subject to antitrust review, but left open to interpretation whether only a cash payment should be considered questionable when a settlement is reached.
For its part, the FTC has consistently maintained that other deal terms may be anticompetitive because any arrangement that causes consumers to wait longer for a lower-cost generic causes economic harm. In particular, the FTC has cited authorized generics. In such instances, a brand-name drug maker would agree not to sell its own lower-priced version of its medicine, which it might otherwise do to compete with a generic drug maker.
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And yet, when it comes to delaying the release of new life-saving drugs, no one, no institution, no group anywhere in the known universe delays more drugs for a longer time than the FDA.