Thursday, October 11, 2012

FTC submits amicus brief "A No-Authorised Generic Commitment Functions as a Payment that Can Induce a Generic Company to Accept a Delayed Entry Date"

The Federal Trade Commission filed an amicus brief in the U.S. District Court for the District of New Jersey stating that an agreement by a branded drug company not to launch an authorized generic (AG) drug “provides a convenient method for branded drug
firms to pay generic patent challengers for agreeing to delay entry.”

The Commission filed its brief to more fully explain the role of authorized generics, and to share the empirical results of its studies on the issue of AGs and no-AG commitments. The FTC filed its brief in the case of Lamictal Direct Purchaser Antitrust Litigation.  According to the study done by FTC, Competition from an Authorized Generic Significantly Reduces the Revenues that a Generic Company Otherwise Would Obtain from Its 180-Day Marketing Exclusivity.  According to FTC, presence of authorized generic reduces first-filer generic’s revenues by 40 to 52 percent, on average,” during the 180-day exclusivity period  The FTC found that a generic company makes significantly less when competing against an AG because: (1) the AG takes a significant share of generic sales away from the first filer; and (2) wholesale and retail prices decrease when the first filer faces an AG.

In the case, the private plaintiffs alleged that branded drug firm GlaxoSmithKline (GSK) paid Teva Pharmaceuticals to delay entry by promising not to compete with authorized generic versions of the drug Lamictal.  A question before the District Court is whether this no-AG commitment qualifies as a reverse payment, thus triggering a rebuttable presumption of illegality under the law, as laid out in a recent court ruling involving the drug K-dur

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