FTC seeks law against 'pay-for-delay' deals

WASHINGTON The chairman of the Federal Trade Commission and several members of Congress are calling for a law against deals that delay the launch of generic drugs onto the market.

FTC chairman Jon Leibowitz and Reps. Chris Van Hollen, D-Md., Bobby Rush, D-Ill., and Mary Jo Kilroy, D-Ohio, want to end so-called “pay-for-delay” deals, whereby branded drug companies pay generic drug companies in return for delaying the release of a generic drug.

“Pay-for-delay deals are a bad prescription for America: When drug companies agree not to compete, consumers lose,” Leibowitz said at a press conference. “Ending this practice as part of healthcare reform is one simple, effective and straightforward way for Congress to help control drug costs.”

According to a study by the FTC, the deals cost consumers an estimated $3.5 billion per year, while deals that involve payments by branded drug companies keep generics off the market for an average of 17 months longer than agreements that don’t include payments.