POTUS orders crackdown on anticompetitive drug practices
An executive order by President Joe Biden has targeted anti-competitive practices in the US drugs market, including a ban of pay-for-delay agreements.
The Executive Order on Promoting Competition in the American Economy highlights increasing consolidation and anti-competitive business practices in healthcare, financial services and agricultural sectors, among others as key factors driving up living costs for Americans.
The order published on Friday, July 9, calls on the Federal Trade Commission (FTC), Health and Human Services Administration (HHS) and the Food and Drug Administration (FDA) to amend healthcare industry practices that result in higher costs for consumers.
Featured in these practices are pay-for-delay agreements, which the Biden administration claims have raised drug prices by $3.5 billion per year.
The order also cites research from the National Bureau of Economic Research, which says that pay-for-delay and similar practices between brand name drug companies and generic manufacturers reduce innovation.
To combat this, the order calls for the FTC to ban pay-for-delay and similar agreements and has also ordered the FDA to work with states and tribes to safely import prescription drugs from Canada.
Additionally, the order also directs the HHS to increase support for generic and biosimilar drugs and to issue a comprehensive plan within 45 days to “combat high prescription drug prices and price gouging”.
Pay-for-delay litigation
In recent months, there have been several antitrust suits in federal courts that target pay-for-delay deals between pharmaceutical giants and generics manufacturers.
In June, direct buyers of the anti-constipation drug Amitza (lubiprostone) submitted a complaint to a Massachusetts district court, claiming that they had suffered antitrust injury as a result of a pay-for-delay deal to block generics of the treatment.
A US district judge also handed down a decision last month that orders an Allergan subsidiary to argue its case before a jury over claims that it used pay-for-delay deals to block generics of its Alzheimers drug.
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