FTC charges Schering-Plough over generics; third such action in 13 months

The US Federal Trade Commission has charged Schering-Plough and twogenerics manufacturers with conspiring to keep a generic version of S-P's potassium chloride supplement K-Dur 20, used in conjunction with high blood pressure drugs, off the market. In its administrative complaint against the firms, the FTC says that, with no generic alternative available, the agreements cost US consumers about $100 million.

"This is the third complaint the Commission has brought in the past year alleging illegal agreements between brand-name and generic pharmaceutical manufacturers," said Molly Boast, acting director of the FTC's Bureau of Competition. "When payments are made to discourage entry, enormous potential for consumer harm exists."

The FTC has charged S-P with illegally paying Upsher-Smith Labs and American Home Products' ESI Lederle unit to keep the generic off the market. In August 1995, Upsher-Smith had sought Food and Drug Administration approval to manufacture and distribute generic K-Dur 20. S-P, which holds a patent on the formulation expiring in 2006, then sued for patent infringement. This served to stay FDA approval of Upsher-Smith's application; if the patent holder files an infringement suit against the generic applicant within the period prescribed by the 1984 Waxman-Hatch Act, FDA approval to market the generic is automatically stayed for 30 months, unless, before that time, the patent expires or is judicially determined to be invalid or not infringed.