Antitrust Law Daily Wrap Up, ANTITRUST NEWS: FTC report reveals “substantial” decline in pay-for-delay agreements, (Dec 22, 2014)

By Greg Hammond, J.D.

Pharmaceutical companies filed a total of 145 final patent dispute settlements in Fiscal Year (FY) 2013, according to an FTC Bureau of Competition report released today. Of the 145 final patent dispute settlements, 29 potentially created “pay-for-delay” agreements between branded and generic drug companies, marking a substantial decline from the 40 potential pay-for-delay settlements filed in FY 2012.

According to the FY 2013 Report, each of the 29 potential pay-for-delay settlements involved: (1) compensation from a brand drug manufacturer to a generic drug manufacturer; and (2) a restriction on the generic drug manufacturer’s ability to market its product in competition with the branded drug. Of the 29 potential pay-for-delay settlements, 14 involved cash payments from the brand manufacturer to the generic; 11 involved a side business deal between the brand and generic manufacturer; and four involved a brand manufacturer’s promise not to market an authorized generic drug already in competition with the generic manufacturer’s product for a period of time.

Out of the 145 final settlements, 10 were classified as containing “possible compensation”; 75 restricted the generic manufacturer’s ability to market its product, but did not contain explicit or possible compensation; and 31 contained no restrictions on generic entry.

In comparison to previous years, the FTC found (1) the number of final settlements in FY 2013 (145) remained nearly the same as FY 2012 (140) and FY 2011 (156); (2) although the number of potential pay-for-delay agreements significantly reduced from FY 2012 (29), the number is similar to FY 2010 (31) and FY 2011 (28); (3) the four potential pay-for-delay settlements involving a no authorized generic commitment as a form of compensation was significantly lower than in FY 2012 (19), FY 2011 (11), and FY 2010 (15); and (4) following the trend of recent years, the vast majority of patent disputes were resolved without compensation to the generic manufacturer and/or without restrictions on generic competition (73 to 80 percent).

News: Antitrust ConsumerProtection FederalTradeCommissionNews