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US sees jump in "pay-for-delay" drug settlements
By Diane Bartz
Last Updated: 2010-07-28 15:46:04 -0400 (Reuters Health)
WASHINGTON (Reuters) - Brand-name drug companies made a record 21 deals so far this fiscal year with generic firms that delayed production of cheaper generic drugs, the U.S. Federal Trade Commission told lawmakers on Tuesday.
The FTC is trying to crack down on so-called "pay-for-delay" settlements, highlighting that when generic versions of a drug hit the market, on average, the price of the medicine falls roughly by half.
The 21 deals in the first nine months of the 2010 fiscal year is up sharply from the 19 made in all of 2009, and up from 16 deals in 2008 and 14 in 2006 and 2007, the FTC said.
But lawmakers also questioned whether the FTC overstepped its bounds during a specific pay-for-delay probe.
At the hearing of a House of Representatives judiciary subcommittee, some lawmakers questioned FTC Chairman Jon Leibowitz about criticisms of the agency's probe of generic drug company Watson Pharmaceuticals .
Watson has accused the FTC of overstepping and sharing confidential information while looking into allegations Cephalon Inc illegally settled patent disputes with Watson and others by paying them not to bring out a cheaper version of its marquee sleep disorder drug, Provigil.
"If in fact true, these allegations are serious," said Representative Howard Coble.
Representative Jason Chaffetz also asked about the battle, in which the FTC has taken Watson Chief Executive Paul Bisaro to court in order to question him about the deal with Cephalon.
FTC's Leibowitz responded: "We play by the rules at the FTC. ... Mr. Bisaro ... is a person who has avoided our subpoena for over a year now, I just don't understand it."
The FTC has been battling the pay-for-delay settlements in court with mixed success, and has pushed for legislation to ban the deals but has failed so far.
Brand-name drug companies and generic companies have lobbied aggressively against the legislative effort.
The Watson-related case is U.S. District Court for the District of Columbia, the Federal Trade Commission v Paul M. Bisaro. No. 10-00289.
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