Although more drug makers are settling patent lawsuits, the U.S. Federal Trade Commission found a dramatic drop in the number of so-called pay-to-delay deals, which the regulator and consumer watchdogs argue unfairly rob Americans of lower-cost alternatives to their prescription medicines.
In discussing the findings, which were from fiscal year 2016, the FTC argued that the decline in such deals underscores the fact that brand-name and generic drug makers can settle patent litigation without having to resort to anti-competitive terms. A trade group for the generic industry, meanwhile, contended the data show that legislation designed to eliminate pay-to-delay deals is unnecessary.
Before we recite the numbers, let us explain how pay-to-delay deals work: A brand-name drug maker settles a patent lawsuit by paying cash or transferring something else of value to a generic rival, which agrees to delay launching a copycat medicine until a specific date in the future. This gives the brand-name drug maker more time to sell its medicine without lower-cost competition.
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