FTC Sues Drug Firms For Delaying Generics

The Federal Trade Commission has filed a lawsuit challenging a business-to-business agreement in which Solvay Pharmaceuticals paid generic drugmakers Watson Pharmaceuticals and Par Pharmaceutical to delay the introduction of lower cost generic versions of AndroGel, Solvay's testosterone-replacement drug. "At a time of escalating health care costs, these unlawful agreements deny patients the benefit of competition between branded and generic pharmaceuticals and ultimately cost consumers hundreds of millions of dollars a year," says David P. Wales, acting director of FTC's Bureau of Competition. In 2003, Watson and Par, through its partner Paddock Laboratories, each sought approval from FDA to market generic versions of AndroGel, which has annual sales of about $400 million. They also challenged the validity of Solvay's patent on the drug, which expires in 2020. FTC's complaint charges that in 2006, Solvay agreed to share its AndroGel profits with the generics-making companies in exchange for agreements to postpone introduction of competing copies until 2015. The generics manufacturers also agreed to drop their patent challenges. Solvay says it is "disappointed but not discouraged" by FTC's action and will "use all means necessary to defend" the agreement.