Hearings/Testimony Before Congress: FTC
Chairman Robert Pitofsky will deliver Commission testimony on Telecommunications Mergers
before the Senate Commerce Committee. (Copies of the testimony are available on
the agency's Web site.)
Comment filed by FTC staff: Staff of the
Bureau of Competition and Office of Policy Planning have provided comments on the U.S. Food
and Drug Administration's proposed rule amending its regulations governing the 180-day
marketing exclusivity provisions of the Drug Price Competition and Patent Restoration Act
of 1984 (the Hatch-Waxman Act). A summary is provided below.
The FTC is an independent administrative agency charged with promoting the efficient
functioning of the marketplace by increasing consumer choice through the promotion of
vigorous competition and other means. The FTC has a strong interest in the prompt entry of
generic drug products into the marketplace to ensure that consumers receive the benefits
of generic drug competition.
The Hatch-Waxman Act has provided the competitive benefits of lower prices and greater
innovation in the pharmaceutical industry by helping to streamline the approval process
for generic drugs. Under the provisions of the Act, the first generic drug company to file
an Abbreviated New Drug Application (ANDA) challenging a branded company's patents for a
particular drug effectively has 180 days of marketing exclusivity, during which time no
other generic competitors may market their product. This provision was enacted to
encourage generic companies to bring their products into the marketplace promptly if they
contend that "either the proposed generic drug does not infringe the patent or the
patent is invalid."
The proposed rule is designed to address the FDA's concern that the first generic
applicant to file this type of application can delay generic competition by entering into
certain commercial arrangements with the branded company. That may have the effect of
delaying the start of the 180-day period of marketing exclusivity and may bar other
generic firms from entering the market even when their products would not infringe a valid
patent. To remedy this situation, the FDA's proposed rule includes a 180-day time limit on
when the first-filed ANDA applicant must trigger its rights to obtain the 180-day
marketing exclusivity period, and by clarifying which applicants are eligible for the
180-day marketing exclusivity.
According to the Commission's comment, the "triggering period" proposed by
the FDA would help ensure that competition in the generic drug marketplace would not be
delayed. Such a "use-it-or-lose-it" triggering period "appears to be
helpful in implementing the Hatch-Waxman's intent to 'make available more low-cost'
generic drugs," and "appears more than adequate to permit the applicant to
prepare to launch the generic product."
In addition, the comment notes that only the first-filed ANDA applicant would be
eligible for the 180-day marketing exclusivity. The comment supports the FDA's proposed
rule not to implement "roving eligibility" if the first applicant later loses
its status as the first filer (for example, by withdrawing or changing its application as
a result of losing or settling its patent suit). Accordingly, the comment states that
"the proposed policy appears to be a reasonable part of a solution to the delay of
generic competition that the FDA has observed."
Finally, the comment suggests that the FDA may wish to consider requiring that 1)
patent litigation agreements (either full or partial settlements) between branded and
generic companies and 2) agreements related to the filing of an ANDA by a potential
applicant, be filed confidentially with the agency in a timely manner and be accessible to
federal antitrust authorities on a nonpublic basis so that these agencies will be aware of
any possible anticompetitive issues involved with such agreements. The Commission has
recently initiated several investigations of agreements between branded companies and
their generic counterparts that may have the effect of forestalling generic competition in
this marketplace, the comment states, and "a system of filing with the FDA could
assure better detection of anticompetitive arrangements that harm consumer welfare."
The Commission vote to approve the filing of staff comments was 4-0.