FTC sues over 'pay-for-delay' generics deal

The Federal Trade Commission is targeting pay-for-delay deals between branded drugmakers and generics firms. In an attempt to block one such deal--in which Solvay Pharmaceuticals paid three generics makers to hold off on copying a testosterone gel--the FTC has filed suit in federal court, hoping that the case will ultimately reach the U.S. Supreme Court.

The deal in question involves Androgel, which is Solvay's second best-selling drug with about $400 million in annual revenues, the Washington Post reports. Watson Pharmaceuticals, Par Pharmaceuticals and Paddock Laboratories challenged Solvay's patent and eventually won FDA approval for their versions of the gel. But Solvay inked a deal with the three challengers: Stay out of the market till 2010 and get a share of Solvay's profits.

It's far from the only deal of that sort, as you know. In recent years, drugmakers have often settled patent fights by paying copycat drugmakers to hold off on introducing their products. Sometimes those deals involve eventual "authorized generic" products; sometimes they trade delays in one country for earlier releases in others (think Pfizer and Ranbaxy on Lipitor). The deals have attracted antitrust probes in both Europe and the U.S.

It's the prevalence of these deals that has the FTC hoping to take the case to the highest court. The agency would like to persuade the Supremes to rule against these deals, now that President Obama's Justice Department is in place and, presumably, would support the antitrust regulators. In the meantime, a bill outlawing pay-for-delay agreements is set for introduction in Congress, much to the chagrin of drugmakers.

- read the Washington Post story
- check out the article from the Associated Press