Statement by Federal Trade Commission Chairman Timothy J. Muris on Generic Paxil Launch

This week, a generic drug manufacturer, Apotex Corp., confirmed that it was commencing U.S. sales of a generic version of the GlaxoSmithKline plc (Glaxo) antidepressant, Paxil – a prescription drug with annual sales in excess of $2 billion. Apotex was able to launch the product earlier than previously expected because Glaxo recently took actions to allow the Food and Drug Administration to approve the generic drug. Glaxo’s actions followed an FDA rule-making and a series of Federal Trade Commission actions evidencing the FTC’s concerns with Glaxo’s practice of obtaining multiple delays of FDA approval of generic versions of Paxil. These developments are an example of how the FDA’s new rule has accelerated generic drug competition.

The Commission has been investigating the potentially anti-competitive implications of Glaxo’s listing of certain patents in the FDA’s Orange Book. Patent listings can be the basis for a delay of FDA approval of generic drugs for 30 months, or even longer if a branded company lists multiple patents.

In July 2002, the Commission also issued a study, Generic Drug Entry Prior to Patent Expiration, that describes various pharmaceutical industry practices that trigger multiple 30-month stays of FDA approval of generic drug products. The Generic Drug Study, among other things, identified various categories of patents that raise questions about whether they are properly listed in the Orange Book and can be a basis for a 30-month stay. One such category is certain "product-by-process" patents. The Generic Drug Study noted that a number of product-by-process patents listed in the Orange Book for Paxil contained only process claims (which may not be listed), and claims drafted in the product-by-process format that recited an admittedly known drug substance made according to a purportedly novel process. In part by listing such patents, Glaxo obtained five overlapping 30-month stays – extending to 65 months the period within which FDA was barred from granting final approval to generic versions of Paxil.

In October 2002, the FDA published a proposed rule-making to eliminate the multiple 30-month stays that the Generic Drug Study had identified as harmful to consumers. The Commission submitted comments to the FDA on its proposed rule. In that submission, the Commission recommended – with express reference to Glaxo's patent listings for Paxil – that "the FDA should revise the text of the proposed regulation to reflect the fact that only product-by-process claims in which the product is novel should be listed." In June 2003, the FDA published a final rule that responds, in part, to the Generic Drug Study and to the Commission's comments on the proposed rule. Consistent with the Commission’s recommendations, the FDA limited the delay of FDA approval of a generic drug to a single 30-month period for any brand-name drug product, and confirmed that product-by-process patents are listable in the Orange Book only where the product claimed is novel.

Shortly after the FDA published the final rule in July 2003, Glaxo asked the FDA to de-list three Paxil-related patents, thus clearing the way for FDA to grant final approval to the generic drug. All three patents were among those identified in the Generic Drug Study as questionably listed, and one of those patent listings had resulted in a 30-month stay that was continuing to block generic entry. The FDA thereafter granted final approval to Apotex’s product – accelerating generic competition for Paxil that likely will bring substantial savings to consumers.

After the FDA issued its final rule earlier this year, I applauded the agency for promoting the timely approval of low-cost generic drug alternatives. The recent developments involving Paxil provide immediate and tangible evidence that the FDA rule is working to accelerate generic drug competition, to the substantial benefit of consumers. The Commission remains steadfast in its commitment to eliminate abuses of the generic drug approval process and practices that harm pharmaceutical consumers.