WASHINGTON (AP) – The Federal Trade Commission says patent settlements between drugmakers that cost U.S. consumers billions each year are on the rise.
The agency reported that the number of lucrative settlements between brand-name and generic drug companies rose to 19 last year from 16 in 2008 and 14 the year before.
The FTC has waged a yearslong campaign against so-called “pay-to-delay” settlements, in which a branded drug company rewards a generic competitor for keeping cheaper versions of its drugs off the market.
Agency officials estimate the deals cost American consumers $3.5 billion per year in unnecessarily high drug prices.
Representatives for both branded and generic drug industries have argued that patent settlements are a useful way to resolve costly litigation which would otherwise delay drug launches even longer.
FTC Commissioner Jon Leibowitz joined House lawmakers at a press conference to urge Congress to include a ban on the settlements in the health care overhaul bill being negotiated on Capitol Hill.
They point to an analysis from the Congressional Budget Office estimating the measure could save the government $1.8 billion in spending over the next decade.
The restrictions on patent settlements are included in the House bill, but not the Senate version. Democratic lawmakers are now trying to combine the two versions so they can be signed into law by President Obama.
Last month Sens. Herb Kohl, D-Wisc., Susan Collins, R-Maine, and seven other Democrats asked majority leader Harry Reid, D-Nev., to include the ban in the final version of the bill.
Traditionally, generic drugmakers challenge the patents on branded drugs to bring their own cheaper versions to market. But under pay-to-delay agreements, the generic drugmaker settles in exchange for either cash or exclusive rights to market the first generic version later.
The FTC criticizes such arrangements as anticompetitive, though agency lawyers have a mixed track record of challenging them in court. In 2005, two appeals courts upheld agreements reached by Schering-Plough Corp. and AstraZeneca PLC with generic companies. Since then, lucrative settlements between generic and branded drugmakers have flourished.
Date: January 13, 2010
Source: Associated Press
Filed Under: Drug Discovery