FTC chief calls for a ban on generic pay-for-delay deals

In the wake of an FTC report that so-called “authorized generics” lower prices, commission chairman Jon Leibowitz says Congress should pass pending legislation to ban or restrict a related mechanism known as pay-for-delay arrangements in which a branded drug company pays potential generic competitors to stay out of the market.

In a speech to the Center for American Progress, Leibowitz said eliminating such agreements could save $35 billion in healthcare costs over 10 years.

“From my perspective, … the decision about whether to restrict pay-for-delay settlements should be simple,” Leibowitz declared. “On the one hand you have savings to American consumers of $35 billion or more over 10 years, about $12 billion of which would be savings to the federal government, and the prospect of helping to pay for healthcare reform as well as the ability to set a clear national standard to stop anti-competitive conduct. On the other hand, you have a permissive legal regime that allows competitors to make collusive deals on the backs of consumers.”

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