Supreme Court vs Congress on "Sweetheart" Deals

Published Online: Tuesday, August 1, 2006

Furious over the Supreme Court's refusal to block payoffs by branded pharmaceutical companies to delay generic competition, a bipartisan group of lawmakers announced plans for legislation to specifically outlaw the practice.

The ruling marked a setback for Federal Trade Commission (FTC) antitrust enforcers, who alleged that multimillion- dollar settlements reached in patent lawsuits involving Schering-Plough Corp and 2 generic drug makers violated federal law.

According to the FTC, the settlements represent payoffs to delay lower-priced generic competition for Schering-Plough's K-Dur potassium supplement. A federal appeals court ruled that the settlements were legal, and the Supreme Court's decision not to hear the case let that ruling stand.

Warning that the high court's failure to act could drive up drug prices to consumers by billions of dollars, Senate Finance Committee Chairman Chuck Grassley (R, Iowa) joined with Sens Herb Kohl (D, Wisc), Patrick Leahy (D, Vt), and Charles Schumer (D, NY) to sponsor new legislation to outlaw these types of drug industry settlements.

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