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1
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STATEMENT
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EXTRACTED KEY WORDS
MARKET ABBOTT PHARMACEUTICALS ACT EXCLUSIVITY CONSENT ORDERS PRIVATE AGREEMENT HYTRIN PROVISIONS DRUG HATCH-WAXMAN ACT ANTITRUST ARRANGEMENTS ADVISORS FIRMS COMMISSIONERS ABBOTT LABORATORIES SELLING COMPETITION BRAND PAID PRODUCER GOVERNMENT ENFORCEMENT ACTION FACTS ADMINISTRATIVE COMPLAINT ANTICIPATE FACTUAL RECORD ADMINISTRATIVE PROCEEDING |
STATEMENT OF CHAIRMAN ROBERT PITOFSKY AND
COMMISSIONERS SHEILA F. ANTHONY, MOZELLE W. THOMPSON, ORSON SWINDLE,
AND THOMAS B. LEARY
Abbott Laboratories and Geneva Pharmaceuticals, Inc.
Docket Nos. C-3945 and C-3946
The attached Analysis to Aid Public Comment, which accompanied our
acceptance of consent agreements with Geneva Pharmaceuticals, Inc. and
Abbott Laboratories, describes the conduct of those two companies in
agreeing that Abbott would pay Geneva to refrain from selling a
generic version of Hytrin, Abbott's branded version of terazosin
hydrochloride. It also describes relevant provisions of the Drug Price
Competition and Patent Term Restoration Act of 1984 ("Hatch-Waxman
Act"), including particularly the provision that gives the first
generic company to seek FDA approval a 180-day period during which it
has the exclusive right to market the generic version of a brand name
drug.
Pursuant to a private agreement not reviewed by any court, Abbott paid
Geneva substantial sums not to enter the market with its generic
version of Hytrin, and not to transfer, assign or relinquish its
180-day exclusive marketing right to any other producer of generic
products that might compete with Abbott. By not selling its generic
version, Geneva prevented the start of the 180-day exclusivity period,
with the result that neither Geneva nor any other company could
introduce a generic version of Hytrin into the market.
The consent orders that we issue today against Abbott and Geneva
represent the first resolution of an antitrust challenge by the
government to a private agreement whereby a brand name drug company
paid the first generic company that sought FDA approval not to enter
the market, and to retain its 180-day period of market exclusivity.
Because the behavior occurred in the context of the complicated
provisions of the Hatch-Waxman Act, and because this is the first
government antitrust enforcement action in this area, we believe the
public interest is satisfied with orders that regulate future conduct
by the parties. We recognize that there may be market settings in
which similar but less restrictive arrangements could be justified,
and each case must be examined with respect to its particular facts.
In March we also issued an administrative complaint against two other
pharmaceutical companies with respect to conduct that is in some ways
similar to the conduct addressed by these consent orders. We
anticipate that the development of a full factual record in the
administrative proceeding will help to shape further the appropriate
parameters of permissible conduct in this area and will guide other
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2
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PITOFSKY STATEMENT
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EXTRACTED KEY WORDS
GENEVA CONSENT ORDERS ABBOTT PHARMACEUTICALS ACT EXCLUSIVITY HYTRIN PROVISIONS DRUG HATCH-WAXMAN ACT ANTITRUST ARRANGEMENTS ADVISORS FIRMS COMMISSIONERS ABBOTT LABORATORIES SELLING COMPETITION BRAND PRIVATE AGREEMENT PAID PRODUCER GOVERNMENT ENFORCEMENT ACTION FACTS ADMINISTRATIVE COMPLAINT ANTICIPATE FACTUAL RECORD ADMINISTRATIVE PROCEEDING |
Statement of Chairman Robert Pitofsky and
Commissioners Sheila F. Anthony, Mozelle W. Thompson,
Orson Swindle, and Thomas B. Leary
Abbott Laboratories and Geneva Pharmaceuticals, Inc.
File No. 981-0395
The Analysis to Aid Public Comment, published today along with
proposed consent orders against Geneva Pharmaceuticals, Inc. and
Abbott Laboratories, describes the conduct of those two companies in
agreeing that Abbott would pay Geneva to refrain from selling a
generic version of Hytrin, Abbott's branded version of terazosin
hydrochloride. It also describes relevant provisions of the Drug Price
Competition and Patent Term Restoration Act of 1984 ("Hatch-Waxman
Act"), including particularly the provision that gives the first
generic company to seek FDA approval a 180-day period during which it
has the exclusive right to market the generic version of a brand name
drug.
Pursuant to a private agreement not reviewed by any court, Abbott paid
Geneva substantial sums not to enter the market with its generic
version of Hytrin, and not to transfer, assign or relinquish its
180-day exclusive marketing right to any other producer of generic
products that might compete with Abbott. By not selling its generic
version, Geneva prevented the start of the 180-day exclusivity period,
with the result that neither Geneva nor any other company could
introduce a generic version of Hytrin into the market.
These consent orders represent the first resolution of an antitrust
challenge by the government to a private agreement whereby a brand
name drug company paid the first generic company that sought FDA
approval not to enter the market, and to retain its 180-day period of
market exclusivity. Because the behavior occurred in the context of
the complicated provisions of the Hatch-Waxman Act, and because this
is the first government antitrust enforcement action in this area, we
believe the public interest is satisfied with orders that regulate
future conduct by the parties. We recognize that there may be market
settings in which similar but less restrictive arrangements could be
justified, and each case must be examined with respect to its
particular facts.
We have today issued an administrative complaint against two other
pharmaceutical companies with respect to conduct that is in some ways
similar to the conduct addressed by these consent orders. We
anticipate that the development of a full factual record in the
administrative proceeding, as well as the public comments on these
consent orders, will help to shape further the appropriate parameters
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3
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DECISION & ORDER
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EXTRACTED KEY WORDS
COMMISSION AGREEMENT DRUG PRODUCT ANDA FIRST FILER FEDERAL TRADE COMMISSION PARTY ACT NDA HOLDER COMPLAINT FDA COURT UNITED STATES GENEVA PHARMACEUTICALS SUBSIDIARIES PURSUANT CONTROL SALE COMPLIANCE INDIRECT THEREAFTER CONSENT ORDER PURPOSES MATTER RELINQUISHING ALLEGED INFRINGER PARAGRAPH PRELIMINARY INJUNCTION SELLING COMMERCE |
9810395
UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION
COMMISSIONERS:
Robert Pitofsky, Chairman
Sheila F. Anthony
Mozelle W. Thompson
Orson Swindle
Thomas B. Leary
In the Matter of
GENEVA PHARMACEUTICALS, INC. ) a corporation.
DOCKET NO. C-3946
DECISION AND ORDER
The Federal Trade Commission ("Commission"), having initiated an
investigation of certain acts and practices of Abbott Laboratories
("Abbott") and Geneva Pharmaceuticals, Inc. (hereinafter referred to
as "Respondent Geneva"), an indirect wholly-owned subsidiary of
Novartis Corporation, and Respondent Geneva having been furnished
thereafter with a copy of a draft complaint which the Bureau of
Competition proposed to present to the Commission for its
consideration and which, if issued by the Commission, would charge
Respondent Geneva with violation of the Federal Trade Commission Act;
and
Respondent Geneva and counsel for the Commission having thereafter
executed an Agreement Containing Consent Order, an admission by
Respondent Geneva of all the jurisdictional facts set forth in the
aforesaid draft complaint, a statement that the signing of said
agreement is for settlement purposes only and does not constitute an
admission by Respondent Geneva that the law has been violated as
alleged in such complaint, and waivers and other provisions as
required by the Commission's Rules; and
The Commission having thereafter considered the matter and having
determined that it had reason to believe that Respondent Geneva has
violated the said Act, and that a complaint should issue stating its
charges in that respect, and having thereupon accepted the executed
consent agreement and placed such agreement on the public record for a
period of thirty (30) days, and having duly considered the comments
filed by interested persons pursuant to Section 2.34 of its Rules, now
in further conformity with the procedure described in Section 2.34 of
its Rules, the Commission hereby issues its complaint, makes the
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4
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COMPLAINT
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EXTRACTED KEY WORDS
ABBOTT MARKET TERAZOSIN HCL PATENT DRUG FDA ACT HYTRIN FEDERAL TRADE COMMISSION INFRINGEMENT ANDA EXCLUSIVITY PERIOD TERAZOSIN HCL CAPSULE UNITED STATES RESPONDENTS SALES AGREEMENT TABLET PARAGRAPH COMPETITION COURT LITIGATION PHARMACEUTICALS BRAND CERTIFICATION MANUFACTURER DISTRICT VIOLATION ENTRY |
9810395
UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION
In the Matter of
ABBOTT LABORATORIES, a corporation, and
GENEVA PHARMACEUTICALS, INC., a corporation.
Docket No. C-3946
COMPLAINT
Pursuant to the provisions of the Federal Trade Commission Act, and by
virtue of the authority vested in it by said Act, the Federal Trade
Commission ("Commission"), having reason to believe that respondents
Abbott Laboratories and Geneva Pharmaceuticals, Inc., have engaged in
conduct, as described herein, that violates Section 5 of the Federal
Trade Commission Act, as amended, 15 U.S.C. § 45, and it appearing to
the Commission that a proceeding in respect thereof would be in the
public interest, hereby issues its complaint, stating its charges as
follows:
The Respondents
1. Respondent Abbott Laboratories ("Abbott") is a corporation
organized, existing, and doing business under and by virtue of the
laws of the State of Illinois, with its office and principal place of
business located at 100 Abbott Park Road, Abbott Park, Illinois 60064.
Abbott is engaged principally in the development, manufacture, and
sale of a broad line of health care products and services. In 1998,
Abbott had net sales of $12.5 billion worldwide and $7.7 billion
domestically. Among other products, Abbott manufactures and sells the
brand-name product Hytrin, a drug that accounts for over 20% of the
net sales of Abbott's U.S. pharmaceutical products division.
2. At all relevant times herein, Abbott has been, and is now, a
corporation as "corporation" is defined in Section 4 of the Federal
Trade Commission Act, 15 U.S.C. § 44.
3. Respondent Geneva Pharmaceuticals, Inc. ("Geneva") is a corporation
organized, existing, and doing business under and by virtue of the
laws of the State of Colorado, with its office and principal place of
business located at 2555 W. Midway Blvd., Broomfield, Colorado 80020.
Geneva, an indirect wholly-owned subsidiary of Novartis Corporation,
is one of the leading generic drug manufacturers in the United States.
Geneva sought and received approval from the United States Food and
Drug Administration ("FDA") to market a generic version of Hytrin.
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5
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AGREEMENT CONTAINING CONSENT
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EXTRACTED KEY WORDS
PROPOSED RESPONDENT CONSENT AGREEMENT COMMISSION COMPLAINT ACCEPTANCE CONTEMPLATES DRAFT GENEVA PHARMACEUTICALS LAW FACTS COMPLIANCE PUBLIC RECORD EFFECTUATE DAVID UNITED STATES FEDERAL TRADE COMMISSION OFFICERS COUNSEL PURSUANT COMPLIANCE REPORT COMMISSION RULE MANNER PROCEEDING HEREBY BUSINESS COLORADO JURISDICTIONAL FACTS RESPONDENT GENEVA WAIVES ACCOMPANYING |
UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION
In the Matter of
GENEVA PHARMACEUTICALS, INC., a corporation.
FILE NO. 981-0395
AGREEMENT CONTAINING CONSENT ORDER
The Federal Trade Commission ("Commission"), having initiated an
investigation of certain acts and practices of Abbott Laboratories
("Abbott") and Geneva Pharmaceuticals, Inc. (hereinafter referred to
as "Proposed Respondent Geneva"), an indirect wholly-owned subsidiary
of Novartis Corporation, and it now appearing that Proposed Respondent
Geneva is willing to enter into this Agreement Containing Consent
Order ("Consent Agreement") providing for relief with respect to such
practices;
IT IS HEREBY AGREED by and between Proposed Respondent Geneva, by its
duly authorized officers and its attorneys, and counsel for the
Commission that:
1. Proposed Respondent Geneva is a corporation organized,
existing, and doing business under and by virtue of the laws of
the State of Colorado, with its office and principal place of
business located at 2555 W. Midway Blvd., Broomfield, Colorado
80020. Geneva, an indirect wholly-owned subsidiary of Novartis
Corporation, is one of the leading generic drug manufacturers
in the United States.
2. Proposed Respondent Geneva admits all the jurisdictional
facts set forth in the draft of Complaint here attached.
3. Proposed Respondent Geneva waives:
(a) any further procedural steps;
(b) the requirement that the Commission's Decision and
Order ("Decision and Order"), here attached and made a
part hereof, contain a statement of findings of fact and
conclusions of law;
(c) all rights to seek judicial review or otherwise to
challenge or contest the validity of the Order entered
pursuant to this Consent Agreement; and
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6
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ATTACHMENT
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EXTRACTED KEY WORDS
GENEVA DRUG ABBOTT COMMISSION COMPLAINT PROPOSED CONSENT ORDERS MARKET PARTIES TERAZOSIN HCL PATENT PAYMENTS CHARGES SETTLEMENT COMPETITION COURT EXCLUSIVITY PUBLIC RECORD ANDA FIRST FILER NDA HOLDER TERAZOSIN HCL CAPSULE PATENT INFRINGEMENT PHARMACEUTICALS HEALTH CARE PRODUCTS LITIGATION TABLET PRODUCT COMPLAINT STATES EXCLUSIVITY PERIOD HATCH-WAXMAN ACT SETTLEMENT PURPOSES |
Attachment to Statement of Chairman Robert Pitofsky and
Commissioners Sheila F. Anthony, Mozelle W. Thompson,
Orson Swindle, and Thomas B. Leary:
Analysis to Aid Public Comment
The Federal Trade Commission has accepted for public comment
agreements and proposed consent orders with Geneva Pharmaceuticals,
Inc. and Abbott Laboratories. The proposed consent orders settle
charges that these parties unlawfully agreed that Geneva would refrain
from selling its generic version of one of Abbott's drugs, in exchange
for payments from Abbott. The proposed consent orders have been placed
on the public record for 30 days to receive comments by interested
persons. The proposed consent orders have been entered into for
settlement purposes only and do not constitute an admission by Abbott
or Geneva that they violated the law or that the facts alleged in the
complaint, other than the jurisdictional facts, are true.
Background
Abbott Laboratories develops, manufactures, and sells a variety of
health care products and services. Based in Abbott Park, Illinois,
Abbott's 1998 net sales worldwide were approximately $ 12.5 billion.
Over 20% of Abbott's net sales of pharmaceutical products in the U.S.
are for a drug called Hytrin. Hytrin is used to treat two chronic
conditions that affect millions of Americans, particularly senior
citizens: hypertension (high blood pressure) and benign prostatic
hyperplasia (enlarged prostate).
Geneva is one of the leading generic drug manufacturers in the United
States. An indirect wholly-owned subsidiary of Novartis Corp., Geneva
is based in Broomfield, Colorado. Geneva developed a generic version
of Hytrin, and in March 1998 received approval from the U.S. Food and
Drug Administration ("FDA") to market that generic product.
A generic drug is a product that the FDA has found to be bioequivalent
to a brand name drug. A company seeking FDA approval to market a new
drug must file a New Drug Application ("NDA"). In order to market a
generic version of a brand name drug, a company must file an
Abbreviated New Drug Application ("ANDA") and receive approval from
the FDA.
Generic drugs are chemically identical to their branded counterparts,
but typically are sold at substantial discounts from the branded
price. A Congressional Budget Office Report estimates that purchasers
saved an estimated $8-$10 billion on prescriptions at retail
pharmacies in 1994 by purchasing generic drugs instead of the brand
name product.
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7
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ANALYSIS
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EXTRACTED KEY WORDS
GENEVA DRUG ABBOTT COMPLAINT COMMISSION PROPOSED CONSENT ORDERS MARKET PARTIES TERAZOSIN HCL PATENT PAYMENTS CHARGES SETTLEMENT NET SALES COMPETITION COURT EXCLUSIVITY PUBLIC RECORD ANDA FIRST FILER NDA HOLDER TERAZOSIN HCL CAPSULE PATENT INFRINGEMENT PHARMACEUTICALS HEALTH CARE PRODUCTS LITIGATION TABLET PRODUCT COMPLAINT STATES EXCLUSIVITY PERIOD HATCH-WAXMAN ACT |
Analysis to Aid Public Comment
The Federal Trade Commission has accepted for public comment
agreements and proposed consent orders with Geneva Pharmaceuticals,
Inc. and Abbott Laboratories. The proposed consent orders settle
charges that these parties unlawfully agreed that Geneva would refrain
from selling its generic version of one of Abbott's drugs, in exchange
for payments from Abbott. The proposed consent orders have been placed
on the public record for 30 days to receive comments by interested
persons. The proposed consent orders have been entered into for
settlement purposes only and do not constitute an admission by Abbott
or Geneva that they violated the law or that the facts alleged in the
complaint, other than the jurisdictional facts, are true.
Background
Abbott Laboratories develops, manufactures, and sells a variety of
health care products and services. Based in Abbott Park, Illinois,
Abbott's 1998 net sales worldwide were approximately $ 12.5 billion.
Over 20% of Abbott's net sales of pharmaceutical products in the U.S.
are for a drug called Hytrin. Hytrin is used to treat two chronic
conditions that affect millions of Americans, particularly senior
citizens: hypertension (high blood pressure) and benign prostatic
hyperplasia (enlarged prostate).
Geneva is one of the leading generic drug manufacturers in the United
States. An indirect wholly-owned subsidiary of Novartis Corp., Geneva
is based in Broomfield, Colorado. Geneva developed a generic version
of Hytrin, and in March 1998 received approval from the U.S. Food and
Drug Administration ("FDA") to market that generic product.
A generic drug is a product that the FDA has found to be bioequivalent
to a brand name drug. A company seeking FDA approval to market a new
drug must file a New Drug Application ("NDA"). In order to market a
generic version of a brand name drug, a company must file an
Abbreviated New Drug Application ("ANDA") and receive approval from
the FDA.
Generic drugs are chemically identical to their branded counterparts,
but typically are sold at substantial discounts from the branded
price. A Congressional Budget Office Report estimates that purchasers
saved an estimated $8-$10 billion on prescriptions at retail
pharmacies in 1994 by purchasing generic drugs instead of the brand
name product.
Congress enacted the Drug Price Competition and Patent Term
Restoration Act of 1984, commonly referred to as "the Hatch-Waxman
Act," to facilitate the entry of generic drugs while maintaining
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