In January 2010, the FTC issued a study that purports to calculate the savings lost to consumers as a result of so-called reverse payment patent settlements. The study, Pay-For-Delay: How Drug Company Pay-Offs Cost Consumers Billions, is the centerpiece of the FTC’s efforts to spur congressional action to ban what the FTC now typically refers to as “pay-for-delay” settlements. The FTC study concluded that enforcement actions and investigations deterred the use of such agreements from April 1999 through 2004, but that such agreements appeared more regularly after 2005 when the Eleventh Circuit, the Second Circuit, and the Federal Circuit issued rulings favorable to such settlements. According to the FTC, reverse payment patent settlements result in generic entry being delayed on average nearly 17 months longer than settlements without ”reverse payments.” The FTC calculated the resulting loss to consumers to be $3.5 billion per year. This same figure was first cited in a speech on the same topic given by FTC Chairman Leibowitz in June 2009.
This study indicates that the FTC continues to make challenges to so-called reverse payment patent settlements a significant priority. As noted, the FTC continues to pursue such challenges in litigation as well as in Congress.