Pay-for-delay deals rise

Report finds increase in pacts among drug companies despite FTC’s efforts to reduce them

A new Federal Trade Commission (FTC) report found an increase in pay-for-delay deals, in which brand-name pharmaceutical companies settle patent litigation with generic-drug companies by reaching agreements that delay the release of cheaper drugs to market.

According to the report, drug companies made 40 pay-for-delay agreements involving 31 different brand-name drugs with combined sales of more than $8.3 million in the 2012 fiscal year. In nearly half of the deals, the brand-name companies agreed not to market their generics that would compete with the generic-drug companies’ products as long as the generic-drug companies promised to delay production of their drugs.

The number of pay-for-delay deals that companies made in 2012, which is 12 more than they made in fiscal year 2011, is the largest since the FTC started collecting such data in 2003.

The increase in pay-for-delay agreements occurred despite the FTC’s efforts to quash such deals. The agency has challenged several settlements in court, claiming they violate antitrust laws.

“This year’s report makes it clear that the problem of pay-for-delay is getting worse, not better,” FTC Chairman Jon Leibowitz said in a statement. “Until this issue is resolved, we will all suffer the consequences of delayed generic entry—higher prices for consumers, businesses and the U.S. taxpayer.”

Read Bloomberg and Thomson Reuters for more about the FTC’s findings.

For more InsideCounsel coverage of pay-for-delay deals, read:

Circuit split reignites debate over reverse payments

Supreme Court may decide whether “reverse payment” settlements violate antitrust law

Court Denies En Banc Review in "Pay for Delay" Generic Drug Case

Pay for Delay

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