The Federal Trade Commission lost an important case Tuesday in its campaign against the practice of brand-name drug manufacturers making payments that keep competing drugs off the market, according to a Dow Jones (subscription required) report.
A federal District Court judge in Atlanta dismissed a lawsuit brought by the FTC against Solvay Pharmaceuticals, the maker of a testosterone replacement drug.
Solvay, a newly acquired subsidiary of Abbott Laboratories, had agreed to pay several drug manufacturers that planned to introduce generic versions of the drug. In exchange for the payments, the generic firms agreed to delay marketing their versions of the drug until 2015.
The FTC has long fought such arrangements, arguing that they are illegal and that they would cost American consumers around $35 billion over the next 10 years.
But courts have not always agreed.
The FTC’s Competition Bureau director, Richard Feinstein, told Dow Jones that today’s ruling was “obviously disappointing.”
The White House included a ban on such payments, known as pay-to-delay settlements, in its proposed health plan. The House included a similar ban in its 2009 health overhaul bill.
Feinstein told Dow Jones that “a new law is the quickest and most effective way to serve the interests of the millions of U.S. consumers who take prescription drugs and deserve unfettered access to lower-cost generic alternatives.”
