The US Federal Trade Commission has failed in a bid to bring a case that could have ended the practice of ‘exclusion payments’ – in which drugmakers pay generics companies to keep their products off the market – to the Supreme Court.

The failure of the case, which stems from a situation in which Schering-Plough forged agreements with two generic drugmakers not to launch copycat versions of its K-Dur 20 (potassium chloride) product, was expected as the US Department of Justice had advised the court against taking it up.

But shortly after the FTC failed in its attempt US Senators Chuck Grassley, Herb Kohn, Patrick Leahy and Charles Schumer said they would go ahead and introduce a bill that would make the practice of exclusion payments illegal. The use of such payments delays the entry of cheaper generic drugs into the marketplace, raising the costs of drug treatment for patients and healthcare payers, they said.

Leahy said: “It is stunning that the US Supreme Court would refuse a request by the FTC to hear a case so important to senior citizens and others needing lower-cost generic medicines. It is also regrettable that the Administration has sided with big drug companies over seniors and the FTC in pushing for this outcome.”

In April, the FTC said that the drug industry had recently resumed this type of agreement, which had been all but abandoned in the late 1990s. The agency started a new investigation into the practice and subpoenaed nearly 200 pharmaceutical companies as part of the probe.

But the FTC has been fighting a rearguard action on the issue. Last march an appeals court overturned an earlier ruling that Schering-Plough had conspired to keep copycat versions of its K-Dur 20 blood pressure drug off the market, and the Supreme Court’s decision not to pursue the case further effectively brings that action to an end.

The FTC also lost another case on appeal that had been brought against AstraZeneca alleging similar activities relating to its cancer drug Nolvadex (tamoxifen), which has since been withdrawn from sale in the USA in the wake of a sales slump.

Meanwhile, it is also looking at a deal between Sanofi-Aventis/Bristol-Myers Squibb and Apotex regarding the antiplatelet drug Plavix (clopidogrel), which has $3.8 billion in annual sales. An agreement between the companies means Apotex will not launch a generic until 2011, in return for an undisclosed settlement fee.