Home / Pharma News / Pay-to-delay deals up by 60% in US

Pay-to-delay deals up by 60% in US Posted 06/06/2011

The number of deals struck between brand-name and generic pharmaceutical companies in the US are on the rise, despite efforts by the US Federal Trade Commission (FTC) to restrict agreements that delay the introduction of lower-cost medicines, according to a report from the agency.

Deals in which brand-name companies paid generic companies challenging patents to delay the introduction of lower-cost medicines increased by more than 60% from 19 in 2009 to 31 in 2010, with 21 of those in 2010 involving first-to-file generics. This is important as this means that no other generic is currently available on the market. Any delay in entry will then add to the burden on patients and other payers as a cheaper generic will not be available until later. In total, the deals involved 22 brand-name products with combined sales of US$9.3 billion.

The FTC report found that patent settlements that include a payment delay generic entry by 17 months longer on average than those that do not include a payment.

FTC Chairman Mr Jon Leibowitz said that these deals ‘are already costing consumers and taxpayers US$3.5 billion a year in higher drug prices’. He added that “the increasing number of these deals is a win-win proposition for the pharmaceutical industry, but a lose-lose for everyone else’.

The US Generic Pharmaceutical Association (GPhA) reacted with disappointment to the report, stating that ‘the FTC is continuing to perpetuate the myth that pro-competitive, pro-consumer patent settlements are harmful to consumers—an unsubstantiated position that has repeatedly failed to receive support in both Congress and the Courts’.

The GPhA disagree that these deals delay generic entry stating that ‘patent settlements have never prevented competition beyond the patent expiry, and generally have resulted in making lower-cost generics available months and even years before patents have expired’.

The GPhA argue that ‘instead of concentrating their efforts on banning these pro-competitive settlements’ it would be better to concentrate efforts on ‘promoting the increased utilisation of generics’.

Editor’s comment

Do these deals delay or not as there are conflicting reports out there. One thing most people can agree on though is that affordable medicines should be available as soon as possible, but what is the best way to make this happen?

Please feel free to share your thoughts via email to editorial@gabionline.net or in the comments section below. What are your views on the continuing pay-to-delay debate? Should legislation be introduced banning these deals? Or do these deals result in generics being available sooner than would otherwise be possible?

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Source: FTC, GPhA

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