FTC Takes Aim At Generics Pay for Delay

A top competition priority this year at the Federal Trade Commission (FTC) is to stop "pay-for-delay" agreements between branded and generic drug manufacturers, FTC Chairman Jon Leibowitz told the House Judiciary Subcommittee on Courts and Competition Policy on Tuesday.

According to newly released agency data, branded and generic drug companies entered into 21 "suspect patent litigation settlements" involving compensation in the first nine months of fiscal 2010 alone. This surpassed the total for all of fiscal 2009, he said.

Those settlements are assigned to "protect" $9 billion in prescription drug sales, said Leibowitz, citing an earlier FTC report. They also delay the availability of cost-saving generics by an estimated 17 months.

At the same time, the settlement filings confirm that brand and generic companies have been settling their disputes without brand companies paying their generic competitors not to compete: 75% of all final patent settlements did not involve compensation from the brand company to the generic, combined with a delay in generic entry, the report said.