Pay-for-delay deals up 60% in US
pharmafile | May 6, 2011 | News story | Sales and Marketing | FTC, generics
Deals to delay generic drugs from coming onto the US market have more than doubled.
The Federal Trade Commission’s staff report found the number of these agreements increased by more than 60 % – up from 19 in 2009 to 31 in 2010.
Overall, the deals reached in the latest fiscal year involved 22 brand-name pharma products, with combined annual US sales of about $9.3 billion.
The FTC’s chairman Jon Leibowitz said: “Collusive deals to keep generics off the market are already costing consumers and taxpayers $3.5 billion a year in higher drug prices.
“The increasing number of these deals is a win-win proposition for the pharmaceutical industry, but a lose-lose for everyone else.”
In another FTC staff study published alongside this report, the FTC found that such settlements delay generic entry by an average of 17 months longer when compared to companies that have not received a payment.
In recent years the FTC has tried to combat these deals, and have even challenged a number of patent settlement agreements in court, contending that they are anti-competitive and violate US antitrust laws.
The agency is also supporting new laws looking to prohibit settlements that increase the cost of prescription drugs.
Such so-called pay for delay deals occur when pharma firms compensate generic companies for delaying the launch of a cheaper version of their branded drug after it has gone off patent.
This extends the amount of time the branded drug can remain unchallenged by cheaper generic versions, allowing pharma to eek out more revenue for a relatively small payment to the generic firms.
This is especially effective for blockbuster drugs whose annual revenue exceeds one billion dollars.
In the US, generic prices are typically at least 20 to 30% less than branded drugs, and in some cases are up to 90% cheaper.
Ben Adams
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