Agencies take aim at patent settlements

Are quid pro quo deals between brand-name drug makers and generics firms in real danger? Euro watchdogs are scrutinizing them, the FTC is suing over them, and the U.S. Congress is considering an outright ban on them.

Perhaps that's because Big Pharma has been cutting deals with generics makers right and left. There's the big Cephalon arrangement that's attracted the FTC's ire: That company paid Teva, Barr, Ranbaxy, and Mylan a total of $200 million to say out of the Provigil market until 2012. The FTC counts 100 deals like this since 2004.

The FTC hasn't had much success in the courts so far, but it's hoping for a grand slam in the Cephalon case. The agency would like the issue to go to the Supreme Court so it can be resolved "once and for all." There's no guarantee, though, that the newly conservative court would rule against these deals. The government's best shot may be in Congress. A Senate committee last week approved a bipartisan bill that would prohibit these arrangements; similar legislation is pending in the House.

Meanwhile, the generics market isn't growing at quite the pace it once was. According to preliminary figures from IMS Health, sales increased by 3.8 percent last year--the same rate as the overall drug market. The market research firm was surprised by those results: "I checked this number and checked it twice," an IMS rep told In Vivo. "We have seen generics growing over the last couple of years somewhere between 10 percent and 20 percent. So to come 3.8 percent is quite dramatic."

- read the Fortune article
- check out the market figures at In Vivo