US pay-for-delay deals decrease in 2013

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US pay-for-delay deals decrease in 2013

Home/Reports | Posted 13/02/2015 0 Post your comment

During 2013, companies filed a total of 145 final patent dispute settlements, of which 29 were potentially anticompetitive or ‘pay-for-delay’ agreements between brand-name and generics companies, according to a new report released on 22 December 2014 by the US Federal Trade Commission (FTC).

The FTC considers a settlement to potentially involve pay-for-delay when the brand-name manufacturer compensates the generics manufacturer and the generics manufacturer is restricted from marketing its product in competition with the brand-name product for some period of time.

The FTC report found that the overall number of final settlements in Fiscal Year (FY) 2013 (1 October 2012 to 30 September 2013) of 145 remained about the same as the last two years – 140 in FY 2012 and 156 in FY 2011. However, potential pay-for-delay settlements made during FY 2013 decreased: 29 compared to the 40 in FY 2012 [1], but were similar to FY 2011 (28) and FY 2010 (31).

The agreements reached in FY 2013 involved 21 different brand-name pharmaceutical products with combined annual US sales of more than US$4.3 billion. A total of 75 of the 145 final settlements restricted the generics manufacturer’s ability to market its product but contained no explicit or possible compensation, while 31 final settlements contained no restrictions on generics entry.

Of the 29 potential pay-for-delay settlements, 13 involved generics that were so-called ‘first-to-file’, meaning the companies were the first to seek US Food and Drug Administration (FDA) approval to market a generic version of the brand-name drug, and, at the time of the settlement, were eligible to market the generic product for 180 days without competition from other generics. This is the lowest number since 2008, and represents a substantial decrease from the previous three years (23 in FY 2012, 18 in FY 2011 and 26 in FY 2010).

In FY 2013, the number of potential pay-for-delay settlements involving an agreement from the brand-name manufacturer not to market an authorized generic as a form of compensation (4) was also significantly lower than in previous years (19 in FY 2012, 11 in FY 2011 and 15 in FY 2010).

The report concluded that ‘as has been the case in recent years, despite the existence of a substantial number of potential pay-for delay settlements in FY 2013, the vast majority (at least 73%, and up to 80%) of patent disputes were resolved without compensation to the generics manufacturer and/or without restrictions on generics competition’.

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Reference
1. GaBI Online - Generics and Biosimilars Initiative. Pay-for-delay on the increase in the US [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2015 Feb 13]. Available from: www.gabionline.net/Reports/Pay-for-delay-on-the-increase-in-the-US

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Source: FTC