FTC Says Pay-for-Delay Settlements Rise to Most Since ’03

Patent dispute settlements including so-called pay-for-delay deals between branded and generic drug companies jumped to 40 in the year ended in September 2012 from 28 the previous year, The U.S. Federal Trade Commission said.

The agreements, the most since the agency began collecting data in 2003, involved 31 different brand-name drugs with combined sales of more than $8.3 billion, the FTC said today in an e-mailed statement.

Of the 40 settlements, almost half involved agreements by the branded firm not to market a so-called authentic generic that would compete with the generic company’s product, the FTC said.

“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 the 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.”

By delaying the entry of cheaper generics into the market, pay-for-delay deals cost Americans $3.5 billion annually, the FTC said.

The FTC has challenged several patent settlements in court, contending that they are anticompetitive and violate U.S. antitrust laws. One case, involving a generic testosterone treatment called Androgel, is pending before the U.S. Supreme Court. The agency also has supported legislation in Congress that would restrict pay-for-delay settlements.

To contact the reporter on this story: Sara Forden in Washington at sforden@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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