US FTC: 'Product-hopping' illegally impedes generic entry

By Dan Stanton contact

- Last updated on GMT

Product-hopping is a tactic of tweaking a formulation close to when it is set to lose its exclusivity to protect it from generic competition
Product-hopping is a tactic of tweaking a formulation close to when it is set to lose its exclusivity to protect it from generic competition

Related tags: Federal trade commission

The US Government is becoming increasingly critical of industry attempts to ward off competition through ‘product-hopping,’ an IP lawyer says.

Last week​, the US Federal Trade Commission (FTC) filed an amicus brief suggesting the US Court of Appeals for the Third Circuit to reverse a judgement ruling in a generic competition lawsuit between Mylan and Warner-Chilcott which it said failed to fully understand the “special characteristics of the pharmaceutical marketplace.”

The issue centred on ‘product-hopping,’ a tactic used by proprietary drugmakers to obstruct generic or biosimilar competition by making modest reformulations to branded products.

A tweaked product impedes generic firms - which have sought FDA approval to sell a generic version only of the original formulation – from having their cheaper copycat product automatically substituted at the pharmacy, something which “maintain the brand’s monopoly through illegal means,”​ the FTC says.

In this specific case, the FTC accused Warner-Chilcott - now Allergan - of “suppressing generic competition through three successive insignificant reformulations” ​of the antibiotic Doryx, and therefore maintaining an unfair monopoly by impeding the entry of generic competition from Mylan.

Lisa Mueller - a partner at Intellectual Property law firm Michael Best – said ‘product-hopping’ circumvents what Congress intended by Hatch-Waxman and while the filing will not affect branded or generic companies directly, the amicus brief is a sign of increasing scrutiny over such practice.

“Going forward, I think it shows that the government, particularly, the FTC is losing patience with the ‘product-hopping’ trick used by the branded pharma companies to prevent substitution at the pharmacy by generic products,”​ she told in-Pharmatechnologist.com.

“Given the current cost of medical care in this country and the strain it is putting on Medicare I think we will continue to see the government being vocal about this going forward.”

Bio-hopping

Mueller also told us it was likely drug firms would attempt to use ‘product-hopping’ tactics with biological products, in light of the growing biosimilar threat and the implications of this week’s TPP (Trans-Pacific Partnership) trade agreement​.

“Given the announcement about the TPP and that biologic [data] protection will be a minimum of five years, I definitely think that innovator companies will use this approach to help protect their products past the expiration of their patents.”

For now, however, Sandoz’s Zarxio is the only biosimilar product approved in the US, and while it was launched last month, the product has not been deemed ‘interchangeable’ by the FDA which is yet to have provided clarity on the substitution of such copycats.

Therefore, Mueller said, “we are likely to see this become a bigger issue once biosimilars are approved as interchangeable.”

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