FTC files amicus brief on pharma "product hopping"

The USA’s Federal Trade Commission revealed yesterday that it has filed an amicus brief before the US District Court for the Eastern District of Pennsylvania explaining that minor, non-therapeutic changes to a branded pharmaceutical product that harm generic competition can constitute exclusionary conduct that violates the nation’s antitrust laws.

Although US courts are properly reluctant to question the innovative value of a new product in most industries, the FTC’s amicus brief state that “the potential for anticompetitive product redesign is particularly acute in the pharmaceutical industry.”

Brand name pharmaceutical companies can try to obstruct generic competitors and preserve monopoly profits on a patented drug by making modest reformulations that offer little or no therapeutic advantages, a tactic known as “product-switching” or “product hopping,” the amicus brief states. Prior to facing generic competition, a brand drug company can, for example, simply withdraw its original product, forcing consumers to switch to the reformulated brand drug and enabling the branded company to keep its market exclusivity and preventing consumers from obtaining the benefits of generic competition, the FTC explains.