Pharmalot: Are pay-for-delay deals good or bad?

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On 13 January 2010, the Federal Trade Commissioner (FTC) Jon Leibowitz held a press conference to deride the ongoing practice in which brand-name drugmakers offer cash or some other inducement to their generic rivals, which, in turn, agree to delay the marketing of lower-cost copycat medicines.


“Pay-for-delay deals are a bad prescription for America: when drug companies agree not to compete, consumers lose”, Mr Leibowitz says in a statement. “Ending this practice as part of healthcare reform is one simple, effective, and straightforward way for Congress to help control drug costs”.

However, as reported by Pharmalot of 13 January 2010, the Generic Pharmaceutical Association (GPhA) is on record as saying the deals give generic makers the right to enter the market before the patent on a brand-name drug expires, giving consumers earlier access to affordable medicines. And sometimes, generic companies are paid for supplying ingredients.

In a GPhA Press Release of 15 October 2009, GPhA President and CEO Kathleen Jaeger stated, “Our shared goal should be making sure that patent settlements benefit, not harm consumers and the healthcare system. To achieve this goal, a CBO score is needed to determine whether the bill could potentially have the unintended effect of benefiting the brand industry and ultimately hurting consumers by keeping more affordable generics from getting to the market in a timely manner”.

What, according to Ms Jaeger, is overlooked in this debate is that settlements that successfully bring to an end patent litigation typically result in the early and predictable introduction of generic competition. “Without the ability to settle litigation, generic companies are far less likely to challenge brand patents to the detriment of the healthcare system and consumers. That is why the current system of a case-by-case review by the federal government to ensure that pro-consumers settlements are not blocked, benefits consumers over brand companies. The generic pharmaceutical industry agrees with the concern of many members of Congress about the few bad settlements, but the fact is that we must avoid a bill that will sweep good settlements in with the bad. The generic industry continues to believe that Congress can successfully address bad settlements without harming pro-consumer, pro-competitive settlements in the process. We hope that the Senate will ask to see a CBO score of this legislation before it moves to the Senate floor”, she stated.

Pharmalot asked visitors if pay-for-delay deals should be permitted. After 121 voters, 81 (67%) voted “No” and 40 (33%) voted “Yes”...


Ed Silverman. Are ‘pay-to-delay’ deals good or bad? Pharmalot. 2010 January 13.

FTC Chairman, Members of Congress Call for Legislation to End Sweetheart “Pay-for-Delay” Deals That Keep Generic Drugs Off the Market.

GPhA Statement on Senate Judiciary Committee Action on Patent Settlements. GPhA Press Release. 2009 October 15.

Source: Pharmalot; GPhA Press Release

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