Transcript FTCGrabBag-MarkusMeier

The FTC, Pharmaceuticals,
Antitrust & IP: A Grab Bag
October 23, 2008
This presentation was prepared from public sources. The views expressed herein do
not necessarily reflect those of the Federal Trade Commission
Session Overview
1. MMA filing review: what goes on inside the
FTC?
2. Legislation to prohibit exclusion-payment
settlements: what’s happening?
3. Authorized generics: antitrust problem or
policy issue?
4. Follow-on biologics: what’s the FTC’s role?
5. Questions and comments.
What Agreements Must Be Filed
Pursuant to MMA?
• One party is an ANDA filer with a Paragraph
IV certification.
• Another party is either the brand or another
ANDA filer for same drug.
• The agreement concerns:
– Manufacture, marketing, or sale of branded
drug, or generic drug; or
– The 180-day exclusivity period
The FTC’s MMA Review Process
• Conduct an initial staff review
– Read the agreement
– Conduct market research using public sources
– Discuss with counsel, if necessary
• Convene the “pharmaceutical screening
committee” to discuss the agreement
• Decide whether to initiate an investigation
Three Questions to Ask in Analyzing
MMA Agreements
• Does the agreement restrict generic
entry?
• Is there compensation to the generic?
• Are the parties sharing monopoly
profits?
Will I Be Told If My MMA Agreement is
Approved?
• MMA is a notice-only statute – no
waiting periods.
• The FTC does not “approve” or “deny”
agreements.
• The staff will contact you if it would like
more information.
Forms of Compensation in Brand/Generic
Settlements Over Time
No Antitrust
Actions
Antitrust
Actions
Initiated
1992 -1999 2000 - 2004*
Schering
and
Tamoxifen
Decisions
PostSchering
and
Tamoxifen
PostSchering
and
Tamoxifen
2005
2006
2007
Settlements
w/ comp. and
deferred entry
9
0
3
14
14
Cash
7
0
0
1
0
Side Deals
2
0
2
10
3
No Authorized
Generic
0
0
1
3
11
*The Commission does not have data for 2003.
Legislation in the 110th Congress
• “The Commission strongly supports legislation to
address competitive problems with pay-for-delay
settlements.”
– FTC Testimony before Senate Subcommittee on Financial
Services and General Government (May 14, 2008).
• Bills in Senate (S.316) and House (H.R. 1902)
• Would ban settlements in which generic:
1. Receives “anything of value” (subject to exceptions); and
2. Agrees not to market an ANDA product for any period.
Authorized Generics: Antitrust Problem
or Policy Issue?
• In recent years, branded companies have started marketing
authorized generics at the same time a Paragraph IV generic
starts its 180-day exclusivity period.
• An “authorized generic” is a prescription drug that is
marketed as a generic, but is manufactured under the
branded company’s New Drug Application
• The likely effect of this practice is subject to debate.
– In the short run, entry of an authorized generic may
benefit consumers by creating immediate generic
competition.
– In the long run, consumers may be harmed because of
decreased incentives by generic companies to pursue
entry on other drugs prior to patent expiration.
The FTC’s Authorized Generic Study
• FTC has committed to Congress to undertake a study.
– Gathering information from about 80 brand companies, 10
authorized-generic companies, and 100 generic companies.
• Purposes of the study:
– Understand the circumstances under which brands launch
authorized generics.
– Provide data and analysis of the effect of authorized
generics on price competition and innovation.
– Build on the economic literature about the effects of generic
drugs on prescription drug pricing.
Agreements Not to Launch AGs
• Some brand and generic companies are
settling Paragraph IV litigation through the
brand’s agreements not to launch an
authorized generic.
• How is this anything other than an
agreement not to compete?
• Such settlements are akin to the brand
handing the generic a bag of cash.
The Paxil Example
• $2.2 billion in annual U.S. sales at time of
generic entry in 2003.
• Apotex expected to earn $530 - $575 million
during the180-day exclusivity period.
• GlaxoSmithKline licensed Par to sell an
authorized generic at same time as Apotex.
• Apotex earned approximately $150 million
during the 180-day exclusivity period.
Follow-On Biologics: The FTC’s Role
• Analyze possible competition issues relating to
follow-on biologics based on experience with patent
settlements and authorized generics.
• FTC Public Statements:
– “The Competitive Implications of Generic Biologics,”
speech by Commissioner Harbour, June 2007
– “The FTC’s Perspective on Biosimilars,” speech by
Commissioner Harbour, September 2008
– FTC Letter to House Committee on Energy and
Commerce, May 2008
• Upcoming FTC Workshop: Competition Issues
Involving Follow-On Biologic Drugs, November 21,
2008.
www.ftc.gov