WASHINGTON - The head of the Federal Trade Commission (FTC) has joined three House Democrats in urging Congress to include in the final health reform package a provision aimed at ending what one lawmaker called an "unholy alliance between a small but powerful set of drug manufacturers" to delay the entrance of generic medicines into the marketplace.

The so-called pay-for-delay deals, in which brand-name drugmakers pay genetic competitors to keep their products off the market for a certain period, have shot up from zero in 2004 to a record 19 in 2009, which FTC Chairman Jon Leibowitz said costs consumers $3.5 billion per year, or $35 billion over 10 years.

"When drug companies agree not to compete, consumers lose," Leibowitz said. "Ending this practice as part of health care reform is one simple, effective and straightforward way for Congress to help control costs."

To seek FDA approval for entry before patent expiration, a generic drugmaker must declare that its product does not infringe the relevant patents or that the relevant patents are invalid. Brand-name manufacturers typically challenge the generic firm's declaration in litigation.

Generic companies prevailed in more than 70 percent of court decisions from 1992 to 2002, and the FTC had successfully been able to deter the use of the pay-for-delay deals until 2004, Leibowitz noted. But since 2005, when two appellate courts upheld the settlement agreements, the pay-for-delay practice has proliferated, he said.

A new FTC analysis showed there were three completed pay-for-delay settlements in 2005, 14 in 2006 and 2007 each and 16 in 2008. Last year there were 19 completed settlements that included payments and restrictions on generic entry. (See BioWorld Today, May 27, 2008.)

House and Senate committees last year passed bills seeking to ban the practice, but only the House version made it into that chamber's health reform legislation. (See BioWorld Today, Oct. 19, 2009.)

At a press conference Wednesday, Reps. Chris Van Hollen (D-Md.), Bobby Rush (D-Ill.) and Mary Jo Kilroy (D-Ohio) pleaded with their colleagues to include the measure in the final reform package currently being negotiated among Democratic leaders. "This payola scandal is an outrage," Kilroy charged. "This practice must be stopped." But Diane Bieri, general counsel for the Pharmaceutical Research and Manufacturers of America, said the FTC had misrepresented the agreements, which she said were legal and have helped to "resolve expensive patent disputes, thereby fostering innovation and improving access to medicines."

Bieri warned that a blanket ban on certain types of patent settlements could "decrease the value of patents, remove an important option for a patent-holder's defense of intellectual property and reduce the incentives for future innovation of new medicines."

GAO Reports 'Extraordinary' Drug Price Hikes

The Government Accountability Office (GAO) this week reported that 416 brand-name drugs had "extraordinary" price hikes from 2000 to 2008, with a majority of those increases ranging from 100 percent to 499 percent.

Congressional investigators said seven products had price increases of 500 percent or more from 2000 to 2008, while 26 medicines had price jumps of 1,000 percent, or tenfold. The GAO noted that the largest price increase for a branded drug during that period was about 4,200 percent.

In 2008 alone, the prices of 71 brand-name medicines had doubled, investigators reported. While soaring prices occurred in 20 therapeutic classes, more than half of those increases were for central nervous system agents, anti-infectives and cardiovascular drugs.

Sens. Charles Schumer (D-NY) and Amy Klobuchar (D-Minn.) called for the investigation after holding a hearing in July 2008 of the Joint Economic Committee about major price increases for small-market drugs. (See BioWorld Today, July 28, 2008.)

"It is hard to find a good-faith explanation for price increases that are this severe," Schumer said.

The lawmakers said the GAO report was "proof" that Medicare should be allowed to negotiate drug prices. "It would help save taxpayers a lot of money," Klobuchar said. The lawmakers urged Democratic leaders to include the Medicare drug price negotiation measure in the final health reform legislation.

NIAID, DC Team to Reduce HIV Infections

The National Institutes of Health allocated $26.4 million this week for a collaborative research initiative between the National Institute of Allergy and Infectious Diseases (NIAID) and the District of Columbia health department designed to decrease the rate of new HIV infections in the city. "Tragically, our nation's capital has one of the highest rates of HIV/AIDS, where about 3 percent of adults and adolescents are infected with the virus," said NIAID Director Anthony Fauci.

The D.C. Partnership for HIV/AIDS Progress is seeking to identify populations at high risk for HIV acquisition and develop effective interventions for reducing their risk; establish a citywide data analysis mechanism to identify and address health issues and outcomes for people receiving HIV care and treatment; augment the District's HIV-related subspecialty medical care and enhance access to research studies; and conduct a pilot program to study the voluntary test-and-treat concept aimed at stemming new cases of HIV infection, Fauci explained.

The test-and-treat hypothesis used for the pilot program is the same model published early last year by the World Health Organization, which said that the HIV epidemic could be significantly curtailed through annual, voluntary HIV testing and immediate antiretroviral treatment for individuals who test positive for HIV infection.

FDA Transparency Plan Includes Online Chats

The FDA this week unveiled the first phase of its Transparency Initiative, which includes a new website featuring short videos describing agency activities and online web chat sessions hosted by regulators. The agency's FDA Basics website also will include a Q&A page where regulators plan to post information about the agency and regulated products.

The FDA's transparency initiative is part of President Obama's pledge for more openness and public participation in government, said Commissioner Margaret Hamburg, who formed a task force last June to advise her on developing the program. (See BioWorld Today, June 8, 2009.)