FTC says formula tweaking may be anticompetitive

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FTC says formula tweaking may be anticompetitive

Generics/General | Posted 09/10/2015 0 Post your comment

The US Federal Trade Commission (FTC) has come down on the side of generics makers in a case about formula ‘tweaking’ by brand-name drugmakers.

On 30 September 2015, the FTC filed an amicus brief before the US Court of Appeals for the Third Circuit explaining that pharmaceutical ‘product hopping’ can violate antitrust laws.

The case involves a lawsuit from generics maker Mylan against Allergan, which claims that Allergan changed the formula of acne medication Doryx (doxycycline) to ward off competition from generics by protecting the new formula through a new patent. Mylan is asking the Court of Appeals to reintroduce the case against Allergan (which originally owned Doryx, but sold it to Mayne Pharmaceuticals). A judge in Pennsylvania had previously dismissed claims of violation of antitrust laws in the Doryx case. The FTC has given its support to the case, saying that the lower court’s ruling was based on a ‘basic misunderstanding of the special characteristics of the pharmaceutical marketplace’.

The FTC explains that, in examining whether such conduct is unlawful, courts should account for the unique aspects of the pharmaceutical marketplace, including the nature of competition between brand-name drugs and their generics counterparts.

The FTC further explains that when brand-name drugmakers ‘tweak’ the formulation of a brand-name drug shortly before its patent expires this prevents automatic substitution of generics – a practice that saves American consumers billions of dollars each year. In this way, brand-name drugmakers can avoid competition from generics by switching patients to the new formula. They can thereby preserve monopoly profits by combining minor product reformulations with efforts to damage or destroy the market for the original formulation. This tactic, commonly called product hopping, can harm consumers.

The FTC also mentions other recent cases. In one case the state of New York sued Actavis, now Allergan, over its Alzheimer’s disease drug Namenda (memantine). Actavis altered the formula and also reduced supplies of the original formula to ensure that patients were switched to the new formulation [1]. In another case, Teva Pharmaceutical Industries and other generics makers claimed that Abbott patented new formulations of its cholesterol-reducing drug TriCor (fenofibrate) with only minor changes in order to block competition.

Reference
1. GaBI Online - Generics and Biosimilars Initiative. Actavis agrees to continue making Alzheimer’s drug for now [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2015 Oct 9]. Available from: www.gabionline.net/Generics/News/Actavis-agrees-to-continue-making-Alzheimer-s-drug-for-now

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Source: FTC