Pay-to-Delay Opponent, FTC Chief Leibowitz, Quits: Respite for Pharma?
After nearly four years as the head of the US Federal Trade Commission, Jon Leibowitz will be leaving the agency on February 15, and the news is likely to be welcomed by drug makers. Why? He has been an industry scourge for railing against pay-to-delay deals, in which in which a brand-name drug maker agrees to pay a settlement to a generic rival in exchange for ending patent litigation and launching a copycat medicine at a future date.
Major Pharma companies – including Pfizer (PFE), Merck (MRK), Novartis (NVS), Sanofi (SNY), GlaxoSmithKline (GSK) and Bristol-Myers Squibb (BMY) -- have had a hard time of late generating revenue growth, as patents expire on blockbuster drugs and company labs fail to develop enough new drugs. So some have turned to pay-to-delay deals to try to wring more revenue out of drugs with expiring patents.
In Leibowitz’s view, these deals are anti-competitive and cost consumers an estimated $3.5 billion annually (see this). In what often appeared to be a Quixotic quest, Leibowitz spent considerable energy trying to get Congress to pass legislation that would restrict these agreements, while simultaneously working the courts in hopes of obtaining enough rulings that would negate various deals (Pharmalot interview with FTC chief).
His legislative efforts went nowhere, but he did finally succeed in convincing the U.S. Supreme Court to review pay-to-delay agreements. The court also agreed to examine another deal that was highlighted in a petition by Merck. The review – arguments will be heard on March 5 – is significant, because the decision could determine the pace at which lower-cost generic drugs become available and, therefore, influence the cost of medicines for Americans (covered in prior Pharma news).
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Ed Silverman, a contributing editor of YCharts, is the founder and editor of Pharmalot. He previously reported on the pharmaceutical industry and other business topics for the Star-Ledger of New Jersey, New York Newsday and Investor’s Business Daily. He can be reached at firstname.lastname@example.org.
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