FTC Issues Report On Authorized Generics

On June 24, 2009, the Federal Trade Commission issued "Authorized Generics: An Interim Report," which presents the first set of results from a study conducted to examine the short-term and long-term effects of authorized generics on pharmaceutical drug competition. Although the report's conclusions do not support legislation banning authorized generics, they do reflect increasing concern at the FTC over litigation settlements that limit a branded drug company's ability to launch an authorized generic in competition with a generic settling party.

The FTC first announced the study in March 2006. At that time, several lawmakers and pharmaceutical industry participants voiced concern over the increased prevalence of authorized generics. Authorized generics are created when a branded company, usually when facing the imminent entry of a generic competitor, provides its own "generic" version of its drug, either directly or by license. Although the Hatch-Waxman Act grants the