FTC eyeing new patent deals for pay-for-delay action

Emboldened by the U.S. Supreme Court ruling on "pay-for-delay" patent settlements, the Federal Trade Commission (FTC) is looking for opportunities to sue drugmakers over suspect deals. "Pharmaceutical litigation can be settled without these cash sweeteners," FTC Chairwoman Edith Ramirez told lawmakers on Capitol Hill (as quoted by Reuters).

In settling patent fights between branded drugmakers and would-be copycats, both sides typically agree on a date for a generic launch. In some settlements, the patent holder also hands over some cash to the generic challenger--sometimes tens of millions or more.

That was the case in the lawsuit recently reviewed by the Supreme Court--in which Solvay Pharmaceuticals agreed to pay as much as $30 million a year to generics makers that wanted to knock off its testosterone drug AndroGel. The Supreme Court stopped short of agreeing with the FTC that such deals are by definition illegal, but upheld the agency's right to challenge them.

As Ramirez told lawmakers during hearings yesterday, the agency is still pursuing the AndroGel case. It also plans to continue with other pay-for-delay cases it's already fighting. And it's investigating newer patent settlements, too. "The vast majority of patent settlements do not involve (pay-for-delay)," Ramirez said (as quoted by Reuters). "What we are trying to stop are anti-competitive settlements."

Meanwhile, a couple of bills introduced in the Senate would further tighten the noose on pharma patent settlements. A bill sponsored by Sens. Amy Klobuchar (D-MN) would outlaw the deals unless a judge expressly deemed them legal. Another authored by Sens. Al Franken (D-MN) and David Vitter (R-LA) would strip the coveted and lucrative 180-day exclusivity rights from generics makers that take part in a pay-for-delay deal, Reuters says.

The Generic Pharmaceutical Association (GPhA) is fighting the bills. As Reuters notes, GPhA chief Ralph Neas says he has built "a bipartisan consensus" against the Klobuchar bill. "It would put in jeopardy the entire business model that brings generic medicines to the market on average 81 months before patent expiration," he said.

Antitrust watchdogs in Europe have been on their own crusade against patent settlements they say are costing government payers billions of euros. Most recently, the EU was reportedly set to file formal charges against 9 drugmakers for their alleged pay-for-delay settlements.

- read the Reuters news

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