Pay-for-Delay Cases Dipped in Fiscal 2014, FTC Report Finds

Patent cases involving payments to delay generic competition have dropped 27 percent following a 2013 challenge to the practice, according to the Federal Trade Commission.

In fiscal 2014 — the first full year since the U.S. Supreme Court expressly permitted the FTC to file antitrust suits in pay-for-delay cases — the commission determined that 21 patent settlements between branded drugmakers and generic competitors involved such agreements. That figure is down from 29 in fiscal 2013 and 40 in fiscal 2012.

“Consumers are better off when there is more competition from lower-priced generic medicines,” an FTC official said in a release accompanying the report. “Although it is too soon to know if these are lasting trends, it is encouraging to see a significant decline.”

In 2013, the Supreme Court ruled 5 to 3 in FTC v. Actavis that the commission is empowered to challenge pay-for-delay settlements through antitrust suits, although it punted on the question of whether such settlements are legal.

The report frames the drop in pay-for-delay cases as evidence of the powerful effect the FTC’s enforcement has had, noting that of the 160 patent settlements between drugmakers in fiscal 2014, 111 involved no form of compensation. Of the remaining 49 cases, 21 were deemed as pay-for-delay, eight were considered “possible” pay-for-delay cases and 20 involved no bar on generic competition.

Read the report here: www.fdanews.com/01-14-16-FTC.pdf.