Pay-for-Delay Deals: FTC Notes Continued Decline Since SCOTUS Ruling

The total number of transactions in which brand-name drug companies pay to delay the entry of generic competitors continues to decline, and only 5 of 170 final 2015 settlements included generic compensation and entry restriction generic, the Federal Trade Commission (FTC) said in a report released on Wednesday.

Fiscal 2015 is the second full year of filings since the Supreme Court ruled FTC v. Canada. Actavis, Inc. in June 2013, when it concluded that a drug company's transfer to a generic competitor to settle a patent dispute could violate antitrust laws. The decline in fiscal 2015 follows a similar decline revealed in a report from the FTC last year.

"In accordance with the 2014 fiscal year, the number of settlements that can lead to late payment continues to decline significantly as a result of the Actavis decision, even though the total number of settlements filed with the FTC has increased," the report says.

During the 2015 financial year, the total number of definitive settlements was 170, compared to 140 in 2012, 145 in 2013 and 160 in 2014. However, the number of potential deferred payment agreements fell to 14 in 2015, from a high of 40 late payment settlements for fiscal year 2012.

Of these 14, 10 included compensation in the form of a cash payment only for litigation costs (one of which included a cash payment of more than $ 7 million), while the other four included a promise of non-commercialization. an authorized generic in competition with the generic manufacturer for a period.

Ten additional definitive regulations are classified by the FTC as containing "possible compensation" because it is not clear whether certain provisions in the agreements are equivalent to what should be considered compensation for the generic patent applicant.

"For example, an agreement containing a declining royalty structure, in which the generic's obligation to pay royalties is reduced or eliminated if a brand launches an authorized generic product, can have the same effect as an explicit commitment without MGAs. ", says the report. .

In addition, 126 of the 170 final regulations limited the ability of the generic manufacturer to market its product, but did not include explicit or possible compensation ...