The Commission has approved the filing of comments with the U.S. Food and Drug Administration regarding the availability of the 30-month stay of FDA approval of generic drug applications and revised Orange Book patent listing requirements. The Commission’s comments, which are available on the FTC’s Web site as a link to this press release, follow-up on the findings and recommendations in the Commission’s June 2002 study, "Generic Drug Entry Prior to Patent Expiration," that described industry practices that delay the approval of generic drugs.
In its proceeding, the FDA requested comments on proposals to amend its regulations governing the availability of, and triggers for, the 30-month-stay provision of the Hatch-Waxman Amendments, as suggested by the FTC study. Specifically, the FDA proposes to: 1) amend its existing rules to state that there will be one and only one opportunity for a 30-month stay of FDA approval of each abbreviated new drug application (ANDA); 2) clarify the types of patents that must and must not be listed in the Orange Book; and 3) revise the declaration statement that new drug application (NDA) applicants must submit as part of the NDA, an amendment to the NDA, or a supplement to the NDA.
According to the Commission’s comments, the FDA’s proposal limiting one 30-month stay opportunity per ANDA, while not identical to the FTC study’s recommendation, "is an important reform that would eliminate a substantial portion of the potential for unwarranted delay of FDA approval of generic drugs identified in the FTC study." Consumers should benefit significantly from earlier market entry of generic drugs, the comments state, which are sold at substantial discounts from brand-name drug products. In addition, according to the comments, "The FDA’s proposals, which clarify the types of patents that can be listed in the Orange Book to trigger a 30-month stay [of generic entry], provide needed assistance to the industry about patent-listing issues."
The FTC comments also offer suggestions to refine the proposed patent listing and declaration requirements. These suggestions would have heightened importance, should a legal challenge render the FDA’s proposed limitation to one 30-month stay vulnerable while, at the same time, upholding the agency’s regulations regarding the listing of patents in the Orange Book that do not satisfy the listing statute (potentially opening the door for multiple 30-month stays based on inappropriately listed patents). In particular, the comments state, "We believe that the proposed requirement that brand-name companies must list polymorph patents increases, rather than decreases, the potential for delayed market entry by generic drug products." Finally, the comments suggest how to address the problem of "double patenting" which is identified in the FTC study, but not addressed in the FDA’s proposals. The Commission vote to file the comments with the FDA was 5-0. (FTC File No. V030002; staff contact is Michael Wroblewski, Office of the General Counsel, 202-326-32922155.)
The Commission has authorized the staff to file comments with the United States Sentencing Commission (USSC) concerning proposed amendments to sentencing guidelines, policy statements, and commentary to implement the Sarbanes-Oxley Act of 2002. The staff filed the comment, which is available on the FTC’s Web site as a link to this press release, on December 18, 2002 in response to the USSC’s request for comments published in the November 27, 2002 Federal Register.
Congress enacted the Sarbanes-Oxley Act of 2002 (Act) in the wake of recent interest in corporate governance. The Act directed the USSC to implement amendments to the United States Sentencing Guidelines (USSG) that would not only address high-loss complex fraud cases, but would also address penalties for all white-collar crime. In October 2002, the U.S. Department of Justice (DOJ) outlined several amendments for the USSC to consider in drafting these sentencing guidelines. Among other things, DOJ proposed revisions to the applicable sentencing guidelines for fraud and obstruction of justice. These suggested revisions were of particular interest to the FTC because of the work it conducts through "Project Scofflaw," which is designed to prosecute violators of FTC-obtained federal court orders, including criminal prosecution in appropriate cases. Accordingly, the FTC staff filed comments with the USSC, which support certain elements of the DOJ proposals.
The FTC staff’s comment concurs generally with the DOJ comment regarding the need for: 1) increased penalties for "lower loss" fraud of less than $120,000; and 2) enhanced penalties for obstruction of justice offenses. Currently, a contemnor’s punishment depends largely on how a judge applies the obstruction of justice guidelines or a specific offense guideline. This can result in a significant disparity in the sentences for nearly identical contempt offenses. Promulgating enhancements to the obstruction of justice guidelines to account for more serious offenses, as detailed in the comments, "will more appropriately reflect specific offense characteristics so there is less disparity in sentences."
The comments conclude, "Although the Sentencing Commission’s amendments address high-loss complex fraud cases, we believe these recommendations will more fully adjust the sentencing guidelines to raise penalties for all white-collar crimes covered by the fraud and obstruction of justice sections of the guidelines as anticipated by the legislation." The FTC vote authorizing the staff to file the comments with the USSC was 5-0. The comments represent the views of the Commission’s Bureaus of Economics and Consumer Protection, and the Office of Policy Planning. (FTC File No. P964910; staff contact is James Reilly Dolan, Bureau of Consumer Protection, 202-326-3292.)
The Commission has authorized the staff to file an amended complaint in the matter currently pending against 1492828 Ontario, Inc., doing business as First Capital Consumers Group (First Capital). The complaint alleged that First Capital violated the FTC Act and the Telemarketing Sales Rule by engaging in a fraudulent advance-fee credit card scheme. Through this action, the Commission has approved the addition of one Canadian corporate defendant, 1533649 Ontario, and one individual defendant, Paul Schroeder, to the original complaint. The Commission vote authorizing staff to amend the complaint was 5-0. (FTC File No. X030001, Civ. No. 02C 7456; staff contact is Karen Dodge, FTC Midwest Region, 312-960-5608; see press release dated October 22, 2002.)
The Commission has approved the release of its 2002 annual report on the Truth in Lending, Consumer Leasing, Equal Credit Opportunity, and Electronic Fund Transfer Acts. The vote to approve the release of the report, which is available on the FTC’s Web site, was 5-0. (FTC File No. P034805; staff contact is Carole L. Reynolds, Bureau of Consumer Protection, 202-326-3230.)
Following a public comment period, the Commission has approved the issuance of a final consent order in the matter concerning Microsoft Corporation, and authorized responses to the commenters of record. The Commission vote to approve the final consent order was 5-0. (FTC File No. 012-3240; staff contact is Ellen Finn, Bureau of Consumer Protection, 202-326-3296; see press release dated August 8, 2002.)
On November 13, 2002, the FTC filed a notice rescheduling the oral arguments in the matter of Schering-Plough Corporation, Upsher-Smith Laboratories, Inc. and American Home Products Corporation. As detailed in the notice, which is available on the FTC’s Web site, the oral argument in this matter will now take place on Tuesday, January 7, 2003, at 10:00 a.m., in the Commission’s Hearing Room 532, Headquarters Building, 600 Pennsylvania Avenue, N.W., Washington, DC 20580.
Copies of the documents mentioned in this release 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. Call toll-free: 1-877-FTC-HELP.