FTC Workshop Signals Continued Focus on Prescription Drug Competition

On November 8, 2017, the US Federal Trade Commission (FTC) hosted a workshop entitled "Understanding Competition in Prescription Drug Markets: Entry and Supply Chain Dynamics" to examine the market and economic factors that impact the price of pharmaceuticals, including generic drug competition and supply chain dynamics. The FTC has been particularly aggressive in the prescription drug space in recent years, challenging both mergers that the FTC alleged would substantially lessen competition by eliminating existing and future competition between drug manufacturers, as well as conduct by branded drug manufacturers that the FTC asserts restricts the ability of generic drug manufacturers to compete.1 In addition to these antitrust investigations and enforcement actions, the FTC also develops policy by hosting workshops and requesting public comments, and often uses these opportunities to bring together scholars and practitioners to discuss issues important to its mission of protecting consumers. This workshop signals that parties should expect the FTC to remain active in the pharmaceutical industry during the Trump Administration. However, the FTC may emphasize other methods, such as policy statements or reports, to address what it views as a need both to encourage additional generic drug competition and to reduce the price of pharmaceuticals to consumers generally.

Background

In announcing the workshop, Acting FTC Chairman Maureen K. Ohlhausen noted that "[c]ompetition is key to containing prescription drug costs" and that "it's critical we identify barriers that may prevent drugs from entering the market, even after applicable patent protections have expired." 2 To accomplish this goal, the workshop included speeches from Acting Chairman Ohlhausen and US Food and Drug Commissioner Dr. Scott Gottlieb, as well as panels featuring academics, economists, and industry representatives on generic drug entry and competition, including a discussion of ways to encourage entry and expand access to drugs, as well as panels on the role of intermediaries in the pharmaceutical supply chain (one on pharmacy benefit managers (PBMs) and one on group purchasing organizations (GPOs)).

The FTC's stated purpose for its workshop was to study the barriers to generic drug competition and whether other market forces create inefficiencies that lead to higher drug prices. Acting Chairman Ohlhausen opened the workshop by stating that the Hatch-Waxman Act was enacted to support the broad...

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