FTC REPORT INDICATES BRAND-GENERIC SETTLEMENTS UP, PAYMENTS DOWN

Patent settlements between brand and generic drugmakers have increased in recent years, and the agreements are being completed without payments from the brand to the generic in exchange for the generic's commitment not to market the product, according to a new federal study.

The FTC has issued a summary report of agreements filed with the commission in fiscal 2004 by generic and branded drug manufacturers. "Overall, the number of patent settlements involving brand-generic litigation has increased," the commission concluded.

In the seven years between 1992 and 1999, there were 14 final settlements between brand and generic firms. By comparison, there have been at least 14 settlements since 2000, with 8 occurring since January 2004, FTC reported.

The Medicare Rx law requires pharmaceutical companies to file patent settlements with FTC and the Justice Department within 10 days of execution.

In its summary of brand and generic pharmaceutical companies, FTC examined the number of agreements received during fiscal 2004 and compared it with data reported in the commission's 2002 study, titled "Generic Drug Entry Prior to Patent Expiration." While the 2002 study showed that generic companies were routinely accepting payments from brand firms not to market its product, FTC's new analysis indicates that the payment trend appears to be over.

To view the FTC report, go to http://www.ftc.gov/opa/2005/01/drugsettlement.htm (http://www.ftc.gov/opa/2005/01/drugsettlement.htm).