FTC report points to huge drop in ‘pay for delay’ payments to generic players

By PharmaCompass

2019-05-30

Impressions: 466 Article

The US saw a rise in legal settlements in 2016 that extended the market exclusivity of branded drugs near the end of their patent life. However, a new report brought out by the Federal Trade Commission (FTC) said almost none of those agreements included a monetary payment from branded drugmakers to generic rivals, commonly known as “pay for delay”.

In fact, FTC found that only one of the 232 agreements between generic and brand drug companies in 2016 contained a side deal or no authorized generic commitment. This was the lowest number of such pay-for-delay agreements since 2004.

For years, the FTC has denounced “pay-for-delay” deals under which branded manufacturers explicitly compensate generic drugmakers to stay off the market past the expiration of patent-protected drugs.

Big drug companies calculate that the ‘pay for delay’ payments are worth it because there are millions of dollars in revenue to be gained for every day a blockbuster drug faces no price competition. For instance, AbbVie's Humira (adalimumab) logged US$ 36 million a day in US sales in the first quarter of 2019.

The Association for Accessible Medicines (AAM), a trade lobby representing the generic industry, quoted the report to say that the new legislation targeting pay-for-delay deals isn't needed.

“By FTC’s own account, current law is working and reverse payment settlements are no longer a systemic problem,” AAM wrote in a statement. “We urge policymakers to revisit the need for legislation given this new report from the FTC.”

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