'Pay for delay' pharma deals cost consumers $3.5B a year

It's known as "pay for delay": the practice under which brand drugmakers pay generics manufacturers to put off the introduction of competing products. Pay-for-delay has come under intense scrutiny of late, both in some quarters of Congress and within the Federal Trade Commission. Within the FTC, apparently, officials have concluded that the practice comes with a high price tag for the public--and they're gearing up to nip such deals in the bud.

In a speech this week to the Center for American Progress, FTC chairman Jon Leibowitz said that stopping pay-for-delay agreements is a high priority for the agency. The FTC is pushing Congress to pass new legislation banning, or at least limiting, such settlements, which officials see as anticompetitive.

If Congress eliminates pay-for-delay settlements, it could save $35 billion or more per year, with about $12 billion of that savings going to the federal government. Such rules would not only help fund reform efforts, they'd also set a tougher national standard for anticompetitive conduct, Leibowitz says.

To learn more about the speech:
- read this Wall Street Journal blog item

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