Annual Highlights 2011

Containing Costs of Prescription Drugs

With the cost of prescription drugs increasing faster than other health care costs, the FTC is committed to preventing mergers or conduct that may allow firms to raise drug prices. In the last year, the Commission challenged seven mergers involving pharmacies or pharmaceutical manufacturers, preserving competition for blood-plasma derived drugs, acne and cancer creams, and pain medicines, among others.

One of the Commission's top priorities continues to be restricting anticompetitive "pay-for-delay" patent settlements. Because these agreements delay the availability of low-cost generic drugs, branded manufacturers profit by continuing to charge monopoly prices and generic manufacturers receive substantial compensation for agreeing not to compete. Meanwhile, consumers, businesses, and government programs such as Medicare bear the heavy costs of higher drug prices. The FTC monitors these agreements, which have increased significantly in response to permissive court rulings; has challenged several in court; and is pressing for a legislative fix to put an end to these deals.

The Commission also brought charges that CVS Caremark misrepresented the prices of certain Medicare Part D prescription drugs on important websites. As a result, some seniors and disabled consumers allegedly paid significantly more for their drugs than they had expected. CVS Caremark agreed to pay $5 million to reimburse affected Medicare Part D consumers for the price discrepancy to settle the charges.

Enforcement Highlights

Policy Highlights