Published Online: Monday, May 1, 2006

Regulators at the Federal Trade Commission (FTC) launched a new study into the effects of "authorized generics" on prescription-drug price competition. The probe was initiated in response to complaints that the practice by some brand name drug manufacturers of licensing third parties or subsidiaries to market unbranded but identical versions of their patent-protected products may discourage the introduction of generic competitors and keep drug prices from dropping. The FTC plans to collect information from an estimated 80 brand name manufacturers, 10 authorized generic drug companies, and 100 independent generic companies.

According to the FTC, the new study "will examine actual wholesale prices (including rebates, discounts, etc) for brand name and generic drugs, both with and without competition from authorized generics; business reasons that support authorized generic entry; factors relevant to the decisions of generic firms about whether and under what circumstances to seek entry prior to patent expiration; and licensing agreements with authorized generics."

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