FTC: 'Authorized' Generic Drugs Harm Generic Companies

Brent Kendall
Dow Jones Newswires 

WASHINGTON (Dow Jones)--Pharmaceutical companies that repackage their patented brand drugs and sell them as "authorized" generic drugs can crowd out a rival generic company that is introducing a competing generic drug, the U.S. Federal Trade Commission said in an interim report released Wednesday.

The FTC said this competition for generic-drug sales produces lower retail drug costs in the short term, which saves money for consumers and the health-care system.

The commission, however, did not offer any findings on whether the entry of authorized generic drugs enhances or undermines drug competition overall.

Generic drug companies have argued that the brand companies' tactics are anticompetitive because they undermine a key federal law Congress passed to encourage generic companies to challenge questionable drug patents.

The generic companies say their brand rivals use the threat of authorized generics as a way to undercut the financial incentives for a true generic maker to offer competing products.

Brand companies say their authorized generic drugs are good for competition.

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