Pay-for-delay settlements fall for second year: FTC report
Pharmaceutical companies have entered into fewer potential ‘pay-for-delay’ patent settlements for the second year in a row, following the US Supreme Court’s decision in FTC v Actavis.
In 2013, the Supreme Court said in the case that the deals, in which a branded drug manufacturer pays a generic competitor to settle patent litigation, could potentially violate anti-competition law and that regulators should be free to challenge them.
Last year, the Federal Trade Commission (FTC) reported that in the fiscal year (FY) 2014 there were 21 settlements, down from 29 in 2013.
In FY 2012, before the ruling, there were 40 deals.
On Wednesday, November 1, the FTC reported that there were just 14 potentially anti-competitive patent settlement deals in FY 2015.
“Moreover, excluding settlements in which the only compensation is the payment of less than $7 million in litigation fees, only five settlements in FY 2015 contained both compensation to the generic and a restriction on generic entry,” said the FTC in a statement.
According to the FTC, the 14 settlements involved 11 different branded pharmaceutical products with combined annual US sales of approximately $4.6 billion.
Ten of the settlements included compensation solely in the form of a cash payment for litigation fees, ranging from $15,000 to $9.5 million, with only one including a cash payment greater than $7 million.
Of the 14 settlements, half involved generics that were “first filers”, ie, the companies that were the first to seek Food and Drug Administration approval to market a generic version of the branded drug.
The total number of settlements filed with the FTC increased slightly from 160 in FY 2014 to 170 in FY 2015.
The FTC said that this caused the proportion of potentially anti-competitive settlements—as a percentage of the total number of settlements filed with the FTC—to decline to the lowest level since FY 2004.
Click here to access the report.
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