The United States Federal Trade Commission (FTC) said April 24 that it’s asking the Supreme Court to rule on whether major pharmaceutical companies can pay competitors to keep generics versions of brand-name drugs off the market, thereby increasing the cost of prescriptions for patients.

The Supreme Court is being asked to review a recent federal appeals court ruling in favor of the Schering-Plough pharmaceutical company, which is accused of paying competitors to delay marketing generic versions of a highly profitable blood pressure medicine.

Under federal law, drug makers are granted a period of patent protection for new medicines, during which time no competing generic drugs can be marketed. Makers of generic drugs are allowed, however, to petition the Food and Drug Administration for approval of generic versions of brand-name drugs that they plan to market when the patent on the original drug expires. Generic drugs are typically cheaper, often much cheaper, for consumers to buy.

What is happening increasingly, the Federal Trade Commission, said, is that pharmaceutical companies, alerted to their competitors’ plans, are entering into settlements with generics manufacturers that involve payments in return for promises to hold off on bringing the generics to market. That in effect extends patent protection for the brand-name drug and allows the original high prices to consumers to continue longer.

Among the drugs for which such extensions have been worked out in recent years, in addition to Schering-Plough’s blood pressure drug K-Dur, are the breast cancer drug tamoxifen manufactured by Astra Zeneca Pic; the drug thinner Plavix, made by Bristol-Myers Squibb and Sanofi-Aventis; and a sleep disorder drug named Provigil, which is made by Cephalon Inc.

In its request for Supreme Court review, the Federal Trade Commission notes that when such agreements are made, it is "Because the parties anticipated that the patentee’s enhanced profits from delayed generic competition would far exceed the generic competitors’ lost profits." That meant "the parties could share a windfall, at the expense of consumers," the FTC said.

The Supreme Court has not yet said if it will take the Schering-Plough case.

The Pediatric Exception

Not involved in the Schering-Plough controversy is a federal law now on the books that gives drug manufacturers extended patent protection if they agree to conduct clinical trials about the safety and efficacy of their drugs for children. Alarmed that in the past there has been almost no testing of whether drugs widely prescribed for children are safe, and what appropriate dosages should be, Congress enacted legislation several years ago to encourage such testing by giving drug companies a "carrot" of extended patent life for drugs in return for a promise to conduct pediatric testing. More than 250 pediatric studies have been conducted since the law was passed in 1997, but the federal Food and Drug Administration has not said how many of those tests involved patent extensions for pharmaceutical companies.