FTC Accuses Schering-Plough of Delaying Sale of Generic Drug
Schering-Plough Corp. announced plans to "contest" a lawsuit filed by the Federal Trade Commission April 2 that alleged that patent settlements between the pharmaceutical company and two generic drug companies included "illegal payments" to delay a low-cost generic version of a "widely used" blood pressure drug from reaching the market. The Wall Street Journal reports that in an administrative complaint filed against Schering-Plough, the Lederle unit of American Home Products Corp. and Upsher-Smith Inc., the FTC said that the deals cost consumers more than $100 million. All five FTC commissioners voted for the complaint, which alleges that Schering-Plough paid Upsher-Smith and AHP "millions of dollars" to delay launching generic versions of K-Dur 20, often prescribed to patients with high-blood pressure or cardiac problems. If successful, the suit would force Schering-Plough to "license K-Dur immediately." "When payments are made to discourage entry [of generic drugs into the market], enormous potential for consumer harm exists," Molly Boast, acting director of the FTC's Bureau of Competition, said (Wigfield/Wilke, Wall Street Journal, 4/3). Schering-Plough said it would "vigorously challenge" the lawsuit, saying that the agreements with Upsher-Smith and Lederle "complied with the law" (Appleby, USA Today, 4/3). AHP and Upsher-Smith issued similar statements "denying the FTC's charges and vowing to fight them" (Wall Street Journal, 4/3). In a statement, Upsher-Smith said that the company "vigorously resists" the charges. Lowell Weiner, a spokesperson for AHP, said that "the evidence will show its settlement was pro-competitive and didn't violate antitrust laws" (Silverman, Newark Star-Ledger, 4/3).
'Industry-Wide Study'
The FTC move against Schering-Plough marks the third time in 13 months that the agency has "brought such charges against a major pharmaceutical company and generic manufacturers" (Baltimore Sun, 4/3). According to the
Bloomberg News/New York Times, the FTC has begun to crack down on "suspected collusion" within the industry to "suppress generic products" (Bloomberg News/New York Times, 4/3). "We have some indications that other agreements are out there that might be problematic, as evidenced by our desire to conduct an industry-wide study," FTC spokesperson Michael Katz said, adding, "From what we see in these cases, there are hundreds of millions of dollars in consumer damage, and yes, I would say that consumers are not getting a fair shake" (Krauskopf,
Bergen Record, 4/3).
Another Case
In addition to filing suit against Schering-Plough, the FTC released an agreement yesterday in a similar case between generic drugmaker Andrx Corp. and Aventis Pharmaceuticals that would "bar" the companies from "making arrangements aimed at delaying generic competition" and would settle an FTC complaint filed in March 2000 (USA Today, 4/3). The agency charged that Aventis "illegally agreed" to pay Andrx "millions of dollars" to "delay introduction of its generic version of Cardizem CD," a drug "widely used" to treat high blood pressure (Wall Street Journal, 4/3).
