The Federal Trade Commission (FTC) has found that the ongoing trend of drug companies settling claims filed by rival generic manufacturers with “pay-for-delay” deals is proceeding unabated. The agency’s Bureau of Competition examined “156 final resolutions of patent disputes between a brand and a generic” during fiscal year (FY) 2011 and found “record numbers” resolving the litigation before a final court ruling on the merits and “significant numbers of such settlements potentially involving pay-for-delay.”
According to the report, “[i]n fiscal years 2010 and 2011, the FTC received 59 potential pay-for-delay settlement agreements, almost equal to the total number of potential pay-for-delay agreements identified in the preceding six years combined.” The 28 settlements logged in FY 2011 involved 25 different name-brand products with combined annual U.S. sales exceeding $9 billion.
FTC Chair Jon Leibowitz contends that the trend is keeping the cost of drugs high. He reportedly said, “While a lot of companies don’t engage in pay-for-delay settlements, the ones that do increase prescription drug costs for consumers and the government each year.” Meanwhile, Senators Herb Kohl (D-Wis.) and Charles Grassley (R-Iowa) have asked the “Super Committee” that is considering ways to reduce the federal budget deficit to include a previously introduced bill (S. 27) that would make these types of deals illegal. The Congressional Budget Office has apparently concluded that the bill would save the federal government some $2.68 billion over 10 years. See The Blog of LegalTimes, October 25, 2011.