US FTC commits to stopping pay-to-delay drug deals, as part of its Budget Testimony

In testimony before the US Senate Subcommittee on Financial Services and General Government of the Committee on Appropriations last week, the Federal Trade Commission described the agency's continuing work to promote competition and protect American consumers, including initiatives to stop fraud and prevent anticompetitive practices such as 'pay-for-delay' deals in the pharmaceutical industry, aimed at delaying the introduction of generic copy drugs.

FTC Chairman Jon Leibowitz summarized the FTC's fiscal year 2011 budget request, noting that strong support from Congress has made the agency more effective in its consumer protection efforts. The testimony stated that, in the past year, the FTC has brought almost 40 law enforcement actions to stop scams that prey on consumers suffering from the financial downturn, and the agency is also engaged in rulemaking and consumer education efforts related to financial services. In the financial services area alone, the FTC has filed more than 100 actions over the past five years, and obtained nearly $500 million in redress for consumers in the past 10 years.

The testimony also highlighted FTC efforts to promote competition, including its top priority, to stop pay-for-delay drug patent settlements between drug originators and generic companies, that it claims cost consumers $3.5 billion per year in higher drug costs. The FTC also challenges anticompetitive health care mergers to help reduce costs, improve quality and encourage innovation.