A group of US Senators have convinced the US Federal Trade Commission to investigate whether so-called authorised generics – resulting from agreements between brandname drug companies and generic counterparts – are anticompetitive.

The news comes as the FTC starts a lawsuit against Warner Chilcott and Barr Laboratories alleging that an agreement between the two companies was tantamount to a conspiracy to keep a generic version of an oral contraceptive, Ovcon 35, off the US market [[09/11/05h]].

Sens Chuck Grassley, Patrick Leahy and John Rockefeller asked the FTC to study the phenomenon back in May saying they believed the practice could have a deleterious effect on the availability of generics, acting as a disincentive to companies seeking to develop them, ensuring that prices remain high for consumers.

The FTC has said it will look into the circumstances under which innovator companies launch authorised generics, examine competition during the 180-day exclusivity period awarded to generics companies that are first to file a copycat product, and look at the effect of generic drug entry on prescription drug prices.

“This study puts us one step closer to closing the unintended loophole that has allowed these products to infiltrate the health care system," said Kathleen Jaeger, president and chief executive of the Generic Pharmaceutical Association.

"This is good news for consumers," said Sen Grassley, who chairs the Senate Finance Committee. "I'm concerned that the practice of authorised generics might give reason for the generics industry to stay away from investing in generic drugs as well as possibly jeopardise the vitality of the industry in the long term.”