[Federal Register Volume 65, Number 201 (Tuesday, October 17, 2000)]
[Notices]
[Pages 61334-61336]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-26649]


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FEDERAL TRADE COMMISSION


Agency Information Collection Activities; Proposed Collection; 
Comment Request

AGENCY: Federal Trade Commission (FTC).

ACTION: Notice.

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SUMMARY: The FTC has investigated several cases in which manufacturers 
of pharmaceutical drug products and generic competitors have allegedly 
entered into anticompetitive agreements to delay generic entry. These 
cases may foreshadow similar anticompetitive agreements that may 
eliminate the benefits to consumers of generic drug competition. The 
FTC is considering a study to investigate how generic drug competition 
has developed in light of certain provisions in the Hatch-Waxman Act 
that govern entry of generic drug products. Before investigating 
whether these provisions of the Hatch-Waxman Act encourage generic 
competition or facilitate the use of anticompetitive strategies, the 
FTC seeks public comments on its proposed information requests to firms 
in the pharmaceutical drug industry. Comments will be considered before 
the FTC submits a request for Office of Management and Budget (OMB) 
review under the Paperwork Reduction Act.

DATES: Comments must be submitted on or before December 18, 2000.

ADDRESSES: Send written comments to Secretary, Federal Trade 
Commission, Room H-159, 600 Pennsylvania Avenue, NW., Washington, DC 
20580, or by e-mail to generic [email protected]>. The submissions 
should include the submitter's name, address, telephone number, and, if 
available, FAX number and e-mail address. All submissions should be 
captioned ``Generic Drug Study--FTC File No. V000014.''

[[Page 61335]]


FOR FURTHER INFORMATION CONTACT: Requests for additional information 
should be addressed to Michael S. Wroblewski, Advocacy Coordinator, 
Policy Planning, Federal Trade Commission, 600 Pennsylvania Avenue, 
NW., Washington, DC 20580; telephone (202) 326-2155, e-mail 
[email protected]>.

SUPPLEMENTARY INFORMATION: Over the next five years, brand-name drugs 
with combined U.S. sales approaching $20 billion will go off patent.\1\ 
Manufacturers seeking to protect the sales of branded drug products may 
have an incentive and ability to enter into agreements with would-be 
generic competitors that would slow or thwart the entry of competing 
generic drug products approved by the Food and Drug Administration 
pursuant to its authority under the Drug Price Competition and Patent 
Term Restoration Act of 1984 (the Hatch-Waxman Act).
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    \1\ National Institute for Health Care Management, 
``Prescription Drugs and Intellectual Property Protection'' at 3 
(August 2000).
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    The FTC invites comment on: (1) Whether the proposed collections of 
information are necessary for the proper performance of the functions 
of the FTC, including whether the information will have practical 
utility; (2) the accuracy of the FTC's estimate of the burden of the 
proposed collections of information; (3) ways to enhance the quality, 
utility, and clarity of the information to be collected; and (4) ways 
to minimize the burden of collecting the information on those who are 
to respond, including through the use of collection techniques or other 
form of information technology, e.g., permitting electronic submissions 
of responses. The FTC will submit the proposed information collection 
requirements to OMB for review, as required by the Paperwork Reduction 
Act of 1995 (44 U.S.C. Chapter 35, as amended).

A. Description of the Collection of Information and Proposed Use

    The FTC proposes to send information requests to approximately 30 
innovator drug companies (i.e., brand-name drug manufacturers) and 60 
generic drug companies to examine their use of agreements and other 
strategies that may affect generic drug competition. The companies to 
which the information requests would be sent include name-brand 
pharmaceutical drug companies that have received notice of the filing 
of an Abbreviated New Drug Application (ANDA), as defined by 21 U.S.C. 
355(j), and generic drug companies that have filed such ANDAs since 
January 1, 1991. In addition to routine questions about the name, 
address, and incorporation date of the responding company and its 
subsidiaries, and the name, business address, and official capacity of 
the official supervising the company's response, the FTC will ask 
innovator drug companies to provide answers to the following four 
questions:
    1. Submit all agreements between the company and any person \2\ 
(including corporations or other business entities acquired since the 
agreement(s) was (were) executed) executed after January 1, 1991, 
relating to \3\ an ANDA, involving any Drug Product.\4\ Examples of 
such agreements include, but are not limited to: (a) Patent litigation 
settlements (full or partial) between the company and persons that have 
filed an ANDA involving any Drug Product; (b) agreements related to the 
filing (or non-filing) of an ANDA by any applicant (or potential 
applicant) involving any Drug Product; (c) licensing agreements between 
the company and persons that have filed an ANDA involving any Drug 
Product; and (d) agreements related to any acquisition, divestiture, 
joint venture, alliance, license or merger by the company of any 
business involving the research, development, manufacture or sale of 
any Drug Product that is the subject of an ANDA. The company is not 
required to submit purchase orders for base active materials, equipment 
and facility contracts, and employment contracts. For any such 
agreement submitted, also submit all studies, surveys, analyses and 
reports which were prepared by or for any officer(s) or director(s) of 
the company (or, in the case of unincorporated entities, individuals 
exercising similar functions) that evaluate or analyze the reasons for 
making such agreement (or any of the provisions in such agreement), and 
indicate (if not contained in the document itself) the date of 
preparation, and the name and title of each individual who prepared 
each such document.
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    \2\ The term ``person'' means any natural person, corporate 
entity, partnership, association, joint venture, or trust which is 
engaged in research and development, planning and design, production 
and manufacturing, distribution, or sales and marketing of any Drug 
Product.
    \3\ The term ``relating to'' means in whole or in part 
constituting, containing, concerning, discussing, describing, 
analyzing, identifying or stating.
    \4\ The term ``Drug Product'' includes any pharmaceutical drug 
substance the company has listed in the publication ``Approved Drug 
Products with Therapeutic Equivalence Evaluations'' (the ``Orange 
Book'') (regardless of whether the Drug Product is currently listed 
in the Orange Book) and specifically includes, but is not limited 
to, drug products which contain certain active ingredients. (A list 
of such active ingredients will be tailored specifically for each 
company based on whether the company has been notified that a 
paragraph IV ANDA has been submitted against it for such drug 
product.)
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    2. Identify all patents that the company has filed in the Orange 
Book and the date of listing (regardless of whether they are currently 
listed in the Orange Book) relating to any Drug Product for which the 
company has been notified of the filing of an ANDA by another person. 
Also indicate if the patent(s) was (were) filed after the company 
received approval of the New Drug Application, as defined under 21 
U.S.C. 355(b) et seq., for the Drug Product. Also submit a copy of each 
such patent identified and identify whether the patent is owned by, 
assigned to, or licensed to the company.
    3. Identify and list all lawsuits since January 1, 1991 (including 
the court, date filed, docket number, parties, current or final status 
(including dates), current or final docket sheet, and any reporter 
cites) to which the company is or was a party that involve an ANDA 
paragraph IV certification related to any Drug Product. Submit the 
complaint, the answer, any motion(s) for summary judgment, and any 
court orders for each such lawsuit.
    4. For each Drug Product for which the company has been notified 
that an ANDA containing a paragraph IV certification had been filed 
with the FDA, state the company's sales, \5\ in units and dollars, by 
dosage for each calendar year since, and including, the year the 
company was notified of the filing of such ANDA.
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    \5\ The term ``sales'' means net sales, i.e., total sales after 
deducting discounts, returns, allowances and excise taxes. ``Sales'' 
includes sales of the Drug Product whether manufactured by the 
company itself or purchased from sources outside the company and 
resold by the company in the same manufactured form as purchased.
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    In addition to routine questions about the name, address, and 
incorporation date of the responding company and its subsidiaries, and 
the name, business address, and official capacity of the official 
supervising the company's response, the FTC will ask generic drug 
companies to provide answers to the following five questions:
    1. Submit all agreements between the company and any other person 
\6\ (including corporations or other business entities acquired since 
the agreement(s) was (were) executed) executed after January 1, 1991, 
relating to \7\ any ANDA involving any Drug Product.\8\ Examples of 
such agreements

[[Page 61336]]

include, but are not limited to: (a) Patent litigation settlements 
(either full or partial) between the company and any Innovator Company; 
\9\ (b) agreements between the company and any other person related to 
the filing (or non-filing) of an ANDA by the company involving any Drug 
Product; (c) licensing agreements entered into with any Innovator 
Company; and (d) agreements related to any acquisition, divestiture, 
joint venture, alliance, license or merger by the company of any 
business involving the research, development, manufacture or sale of 
any Drug Product that is the subject of an ANDA. The company is not 
required to submit purchase orders for base active materials, equipment 
and facility contracts, and employment contracts. For any such 
agreement submitted, also submit all studies, surveys, analyses and 
reports which were prepared by or for any officer(s) or director(s) 
(or, in the case of unincorporated entities, individuals exercising 
similar functions) that evaluate or analyze the reasons for making such 
agreement (or any of the provisions in such agreement), and indicate 
(if not contained in the document itself) the date of preparation, and 
the name and title of each individual who prepared each such document.
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    \6\ See n. 2 supra.
    \7\ See n. 3 supra.
    \8\ The term ``Drug Product'' includes any pharmaceutical drug 
substance listed in the Orange Book (regardless of whether the Drug 
Product is currently listed in the Orange Book) and specifically 
includes drug product containing certain active ingredients. (A list 
of such active ingredients will be tailored specifically for each 
company based on whether the company has submitted a paragraph IV 
ANDA for such drug product.)
    \9\ The term ``Innovator Company'' means each company (including 
its predecessors in interest, subsidiaries, affiliates, successors, 
and assigns) that has filed a New Drug Application, as defined under 
21 U.S.C. 355(b) et seq. for any Drug Product.
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    2. Identify and list all lawsuits since January 1, 1991 (including 
the court, date filed, docket number, parties, current or final status 
(including dates), current or final docket sheet, and any reporter 
cites) to which the company is or was a party involving an ANDA 
paragraph IV certification. In those cases in which the company is not 
the sole defendant, describe how litigation expenses are or have been 
distributed among the parties.
    3. Identify when the company began first commercial marketing of a 
generic version of any Drug Product approved by the FDA since January 
1, 1991 in those instances in which the Innovator Company brought an 
action for infringement of a patent against the company or any other 
ANDA applicant (or, if applicable, indicate that no such commercial 
marketing has occurred). Identify when the company received tentative 
and final approvals from the Food and Drug Administration (FDA) for 
such Drug Product.
    4. Identify each instance in which the company has asserted before 
a court or before the FDA that a patent was improperly or untimely 
listed as defined in 21 U.S.C. 355(b) or (c). For each such assertion, 
submit the pleading(s) in which such assertion was made and any 
responsive pleading(s).
    5. For each Drug Product for which the company has filed an ANDA 
containing a paragraph IV certification, state the company's sales \10\ 
(if any), in units and dollars, by dosage for each calendar year since, 
and including, the year the company received approval of such ANDA.
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    \10\ See n. 5 supra.
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    The FTC will obtain the information sought by interrogatories and 
document requests under section 6(b) of the FTC Act, 15 U.S.C. 46(b). 
The documents and information obtained through these orders will help 
the FTC determine whether agreements or other strategies are being used 
to delay generic drug competition and thus may merit law enforcement 
action, and to evaluate the effectiveness of the generic drug 
provisions of the Hatch-Waxman Act. It should be noted that subsequent 
to this notice any destruction, removal, mutilation, alteration, or 
falsification of documentary evidence that may be responsive to this 
information collection within the possession or control of a person, 
partnership or corporation subject to the FTC Act is subject to 
criminal prosecution. 15 U.S.C. 50; see also 18 U.S.C. Sec. 1505.

B. Estimated Burden Hours

    The FTC will ask members of the pharmaceutical industry to answer 
several written questions and to produce documents related to the 
answers provided. Because the responses will necessarily vary depending 
upon the extent to which drug companies have entered into such 
agreements, listed patents in the Orange Book, engaged in litigation 
related to ANDAs containing a paragraph IV certification, and 
commercially marketed particular generic drug products, the FTC has 
provided a range of estimated response times from 90 hours to 400 
hours. The total estimated burden of answering the questions and 
producing documents per respondent is based on the following:
    Organize document and information retrieval: 15-50 hours.
    Identify requested information: 15-150 hours.
    Retrieve responsive information: 20-80 hours.
    Copy requested information: 20-40 hours.
    Prepare response: 20-80 hours.
    Thus, the cumulative hours burden to produce documents and prepare 
the response sought will be between 8,100 hours (90 hours  x  90 
companies) and 36,000 hours (400 hours  x  90 companies).

C. Estimated Cost Burden

    It is not possible to calculate with precision the labor costs 
associated with answering the questions and producing the documents 
requested, as responses will entail participation by management and/or 
support staff at various compensation levels among many different 
companies. Individuals among some or all of those labor categories may 
be involved in the information collection process. Nonetheless, the FTC 
has assumed that mid-management personnel will handle most of the tasks 
involved in gathering and producing the responsive information, and has 
applied an average hourly wage of $150/hour for their labor. The FTC 
also has applied an average hourly wage of $10 for the labor of 
clerical employees who will copy the responsive materials. Thus, the 
labor costs per company should range between $10,700 [(70 hours  x  
$150/hour) + (20 hours  x  $10/hour)] and $53,000 [(350 hours  x  $150/
hour) + (50 hours  x  $10/hour)].
    The FTC estimates that the capital or other non-labor costs 
associated with the information requests will be minimal. Although the 
information requests may require that respondent retain copies of the 
information provided to the Commission, industry members should already 
have in place the means to store information of the volume requested. 
In addition, respondents may have to purchase office supplies such as 
file folders, computer diskettes, photocopier toner, or paper in order 
to comply with the Commission's requests. The FTC estimates that each 
respondent will spend $500 for such costs regarding the information 
request, for a total additional non-labor cost burden of $45,000 ($500 
x  90 companies).

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 00-26649 Filed 10-16-00; 8:45 am]
BILLING CODE 6750-01-P