FTC TO TESTIFY AT REVERSE-PAYMENTS HEARING
FTC Commissioner Jon Leibowitz has been called by Congress to present his agency's views on reverse payments at a Jan. 17 hearing being held to examine the effect of these out-of-court settlements on delaying generic market entry.
Leibowitz is listed as the lone witness on one of two panels expected to testify before members of the Senate Committee on the Judiciary.
A reverse payment is the practice where a brand company pays a generic firm to delay the launch of a competing generic product. The FTC has made several attempts to stop the practice of settling patent infringement litigation with reverse payments. The agency's concerns point to the delayed entry component of the agreement, which has the potential to influence market activity.
In November 2005 the FTC filed a complaint with the Supreme Court regarding a reverse-payment agreement between Barr Laboratories and Warner Chilcott. In the deal, Barr delayed plans to launch generic Ovcon after it received $20 million from Warner, which earned $95 million in Ovcon sales from July 2005 to July 2006.
In another reverse-payment objection, the FTC filed a complaint with the Supreme Court challenging a federal appeals court decision that set aside a lower court ruling that would have blocked Schering-Plough from paying two generic companies a combined total of about $90 million to not launch generic K-Dur (potassium chloride).
Earlier this month, Sen. Herb Kohl (D-Wis.), the incoming chairman of the Judiciary Committee's Antitrust, Competition Policy and Consumer Rights Subcommittee, introduced a bill that would explicitly prohibit brand drugmakers from using reverse payments to delay generic entry.
The second panel of witnesses includes representatives from PhRMA, Barr Pharmaceuticals and Consumers Union.