UPDATED: GPhA says patent settlements saved system $25.5B

The U.S. Supreme Court last month weakened drugmakers' position in generic drug pay-for-delay deals, saying they can be sued and then must prove their patents can stand up to challenge. The Federal Trade Commission (FTC) and some consumer groups would like Congress to go further and make the deals illegal. But the Generic Pharmaceutical Association (GPhA), which has defended the deals, has new stats it hopes can persuade Congress to leave well enough alone.

GPhA published a study today from the IMS Institute for Healthcare Informatics that says the settlements have saved payers and consumers $25.5 billion from 2005-2012 and brought generic medicines to market on average 81 months sooner than if they had not hit until their actual expiration. The study says if the current system is left to work as is, it will save another $61.7 billion on the drugs that it evaluated.

"In particular, the new analysis estimates that patent settlements--including those with consideration--have led to billions in savings," GPhA CEO Ralph G. Neas said. "For example, the settlement involving Lipitor alone will save $22 billion over the next four years. This is critical for lawmakers to understand, because any further restrictions on settlements will put these savings at risk."

The 5-3 decision last month by the Supreme Court ruled that the FTC has the right to challenge brand-name drugmakers' patent settlements with generics companies. The opinion didn't buy the FTC's position that these patent settlements should be viewed as anticompetitive unless proven otherwise, but it removed the shield companies have enjoyed from most lawsuits over the deals. Many legal experts think the ruling won't do much to change the status quo, although the FTC may push harder. The FTC has estimated that pay-for-delay deals cost taxpayers about $3.5 billion a year and that a ban could cut the federal deficit by $2.67 billion over 10 years.

Groups like the AARP continue to agitate for new laws that would ban the practice, arguing that they cost, not save, consumers billions of dollars. The AARP indicated Wednesday that it was unimpressed with the new study. Ariel Gonzalez, diretor of federal health and family advocacy, said in an email, "AARP continues to urge Congress to prohibit these harmful agreements, which will help make less-expensive generic drugs available more quickly and also prevent patients from forgoing needed medications because of the high costs of brand-name drugs."

- here's the release

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