FTC Reports Slight Decrease in Pay-for-Delay Deals in FY 2013

The Federal Trade Commission counted 29 pay-for-delay deals in fiscal year 2013 out of a total of 145 patent litigation settlements between brand and generic drugmakers — a slight decline from 2012, but in line with the two previous years.

In FY 2012, there were 40 pay-for-delay deals out of 140 final infringement settlements, the FTC says. While that is significantly higher than the number of pay-for-delay agreements recorded in FY 2013, it proved an outlier from earlier years, with 31 such deals in FY 2010 and 28 in FY 2011. The government’s fiscal year runs from Oct. 1 to Sept.30.

The study drew on data from pharma settlements reported to the Department of Justice and the FTC under the Medicare Modernization Act of 2003.

The 29 potential pay-for-delay deals in FY 2013 were settled over 21 different therapies with a total of $4.3 billion in annual sales in the U.S., the FTC says. Included were 13 first-filer generics. Fourteen of the 29 included a cash payment to the generics firm that was billed as reimbursement for attorney fees, while another 11 came with some other side business deal compensation. Four of the settlements came with a promise by the brand manufacturer not to introduce an authorized generic version.

Of the 145 total deals counted, 75 showed no explicit or possible compensation and 31 did not create any barriers to generic entry, according to the FTC.

The FTC offers no explanation for the recent downtrend in settlements.

See the FTC study here: www.fdanews.com/12-23-14-FTC-Patent-Settlements.pdf. — Bryan Koenig