FTC Staff Issues Advisory Opinion Regarding Generic Pharmaceutical Association's Proposed Initiative to Address Drug Shortages

FTC Staff Issues Advisory Opinion Regarding Generic Pharmaceutical Association's Proposed Initiative to Address Drug Shortages
Program's Numerous Safeguards Make It Unlikely to Harm Competition

The Federal Trade Commission's Bureau of Competition staff has issued an advisory opinion letter, in response to a request from the Generic Pharmaceutical Association (GPhA), stating that the staff will not recommend a challenge to an initiative intended to help the U.S. Food and Drug Administration respond to the unprecedented increase in shortages of critically important medications.

The proposed program, called the Accelerated Recovery Initiative (ARI), would provide the FDA with information that GPhA believes will enable the FDA staff "more efficiently and effectively to accelerate the recovery of critical drugs in short supply." The staff letter explains that a key element of the ARI is an agreement among drug manufacturers to pool competitively sensitive production information about shortage drugs. As a result, the ARI would raise substantial antitrust concerns if this information were shared among competitors, because such information could facilitate collusion among drug manufacturers.

However, the advisory opinion states, "GPhA has designed the program to safeguard competitively sensitive information" and "to limit the potential that the ARI might result in harm to competition." Among other things, the letter notes, GPhA has selected an independent third party to collect and transmit the data to the FDA, and no other party – including GPhA – will have access to the information or any analysis derived from it. In addition, the advisory opinion states, the ARI includes other features intended to minimize the risk that the program would facilitate collusion among drug manufacturers or cause other harm to competition, such as requiring binding commitments on ARI participants not to use the program for anticompetitive ends.

In light of all these safeguards, the FTC staff concludes that the proposed ARI program is unlikely to harm competition. Therefore, the staff has no present intention to recommend an enforcement action to challenge the program, "if it is implemented as described and the safeguards it contains are adhered to in practice."

The advisory opinion can be found on the FTC's website and as a link to this press release.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC's online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC's website provides free information on a variety of consumer topics.  Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

    Office of Public Affairs

    Markus H. Meier
    Bureau of Competition

(FTC File No. P123500)
(FYI 26.2012.wpd)