Congress grills generics firms on pay-for-delay

Generics makers were on the hot seat in Congress yesterday. They got a cross-examination from lawmakers who are plotting to ban patent settlements that delay generic drugs. It's just the latest in a government bid to quash such settlements. The Federal Trade Commission has been targeting drugmakers that pay generics makers to put off their launches of copycat meds, so-called "pay for delay" deals.

Executives for Mylan and Endo Pharmaceuticals appeared before the House Judiciary Committee, making a game attempt to defend their patent-dispute settlements. Endo's VP for intellectual property Guy Donatiello told the committee that settlements could actually be good for consumers, because they sometimes allow generics onto the market before a drugmaker's patent officially expires. "While it's a delicate balance, the current system works," he said (as quoted by Dow Jones).

Heather Bresch, Mylan's COO, took a different tack. She explained that generics firms often find themselves between a rock and a hard place: The pay-for-delay arrangement or competition from an "authorized generic" launched by the branded drugmaker. When faced with a patent challenge, the branded drugmaker often threatens to preempt challengers' copycat versions with their own "authorized generic," which is exempt from the 180-day exclusivity period that makes being first-to-file on generics so lucrative. And she named names; in written testimony, Bresch pointed to Eli Lilly and GlaxoSmithKline.

The FTC answered Bresch, saying that the agency is studying authorized generics now, too. And the fact remains that generics makers benefit greatly from pay-for-delay deals, the agency's rep said. They're a "win-win" for drug companies, said Richard Feinstein of the FTC's Bureau of Competition, and not so much for patients. "Generic companies are getting paid handsomely to sit on the sidelines," he said.

- see the Mylan release
- read the Dow Jones piece

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