FTC Issues Annual Overview of Pharmaceutical Patent Settlements

FTC Issues Annual Overview of Pharmaceutical Patent Settlements

According to a report issued by the FTC yesterday, a record number of settlements between brand name and generic drug manufacturers reported to the Commission last year potentially constituted so-called “pay-for-delay” agreements. Defined by the FTC as a settlement involving both compensation to the generic as well as limitations on the generic’s ability to market its product, the report states that of the 140 total settlements reported, 40 potentially involved pay-for-delay—a sharp increase from the 28 reported in 2011. This is despite the fact that the overall number of settlements declined compared to 2011. Furthermore, it is worth noting that the time period covered by this report in large part pre-dates the K-Dur decision, where the Third Circuit held that pay-for-delay agreements are presumptively unlawful. The report also states that of the 40 potential pay-for-delay settlements, 19 included a “no-AG” provision restricting the brand from introducing an authorized generic, thus setting another record and almost doubling the number reported in 2011 (11). Other interesting data points from the report include the following:

  • 43 settlements involved generics eligible for 180-day exclusivity, over half of which included both compensation to the generic and provisions restricting the generic’s ability to market its product.
  • 7 branded products had multiple settlements involving compensation and restrictions on entry.
  • Over 70% of settlements did not involve compensation to the generic.
Below is a table from the report summarizing the types of agreements reported to the Commission since mandatory reporting of these agreements was imposed under the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. FTC Issues Annual Overview of Pharmaceutical Patent Settlements  

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