FTC Offers Recommendations on Amendments to Greater Access to Affordable Pharmaceuticals Act

Federal Trade Commission Chairman Timothy J. Muris today told the Senate Judiciary Committee that the agency supports most of the provisions of the Senate and the House versions of the Greater Access to Affordable Pharmaceuticals Act which amends the Hatch-Waxman Act. The testimony offered suggestions to improve the Act.

Both the Senate and House bills limit brand-name companies to only one 30-month stay per drug product, per Abbreviated New Drug Application (ANDA) for patents listed in the Orange Book prior to a generic company filing its ANDA. This change was recommended in a July 2002 FTC report, “Generic Drug Entry Prior to Patent Expiration: An FTC Study.”

Also consistent with an FTC Study recommendation, under both bills, “if a brand-name company initiates a patent infringement suit against a generic applicant, the generic applicant may assert a counterclaim seeking an order requiring the brand-name company to correct or delete the patent information listed in the Orange Book,” the testimony stated. The FTC, however, suggests that Congress modify this provision to “parallel the bases for listing patents in the Orange Book.”

Muris noted that both bills incorporated the FTC study recommendation that requires brand name companies and generic applicants to file patent settlement agreements with the FTC within 10 days of execution.

The testimony expressed concerns about the likely effect on generic entry of the bills’ revised180-day exclusivity provision. “First, the provision may cause first generic applicants to delay commercial marketing as compared to the current regulatory structure,” Muris stated. He noted that currently, the 180-day exclusivity is triggered by any district court decision, not by an appeals court decision. “This rule has the effect of encouraging the first generic applicant to market as soon as possible thereafter or risk loss of the exclusivity,” Muris said. The testimony cautioned that, should the 180-day period begin only after an appeals court decision, consumers may be forced to wait longer for generic options and the price reductions that accompany them.

Muris also indicated that the district court decision trigger for the 180-day exclusivity is important to encourage the introduction of commercial marketing by other generic applicants. The FTC recommends that the “failure to market” forfeiture provision, triggered when the first generic applicant fails to market within 75 days of receiving final approval of its ANDA or an appeals court decision on the patents, should be amended so that the first generic applicant “forfeits the 180-day exclusivity if it does not begin commercial marketing within 75 days of a) receiving final approval of its ANDA; or b) a district court decision on the patents that were subject to paragraph IV certifications by the first applicant.”

Muris concluded with an FTC recommendation to amend the language of the “failure to market” forfeiture provision in both bills. This recommendation seeks to “ensure that court decisions dismissing a declaratory judgement action for lack of subject matter jurisdiction trigger the first applicant’s 180-day period.” Muris noted that the amendment is necessary so the “180-day period does not unreasonably block a subsequent generic applicant’s market entry after allowing the first applicant a reasonable time to begin commercial marketing.”

The Commission vote to approve the testimony was 5-0.

Copies of the testimony are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC’s Bureau of Competition seeks to prevent business practices that restrain competition. The Bureau carries out its mission by investigating alleged law violations and, when appropriate, recommending that the Commission take formal enforcement action. To notify the Bureau concerning particular business practices, call or write the Office of Policy and Evaluation, Room 394, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave., N.W., Washington, D.C. 20580, Electronic Mail: antitrust@ftc.gov; Telephone (202) 326-3300. For more information on the laws that the Bureau enforces, the Commission has published Promoting Competition, Protecting Consumers: A Plain English Guide to Antitrust Laws, which can be accessed at http://www.ftc.gov/bc/compguide/index.htm.

(FTC Matter No. P859900)