US wants drugmakers delaying generics to pay

Federal Trade Commission seeks settlement of $1bn or more

Pharmaceuticals made by Actavis, one of the defendants in the lawsuits brought by the US Federal Trade Commission. Photograph: Justin Sullivan/Getty Images

Pharmaceuticals made by Actavis, one of the defendants in the lawsuits brought by the US Federal Trade Commission. Photograph: Justin Sullivan/Getty Images

Fri, Mar 28, 2014, 20:07

The US Federal Trade Commission is seeking a settlement of $1 billion or more from pharmaceutical companies it has sued for delaying the sale of cheaper medicines after patents on brand-name drugs may have expired, an FTC official told a legal conference tonight.

The antitrust agency alleges that the way drugmakers settle patent-related lawsuits hurts consumers by making drugs more expensive. In the settlements, makers of brand-name drugs pay millions of dollars to generics companies while they delay putting their products on the US market.

In June, the US Supreme Court ruled that the FTC may challenge the deals in federal courts. A panel moderator at the American Bar Association’s spring antitrust meeting asked Deborah Feinstein, director of the FTC’s bureau of competition, what developments to expect in the coming year. “My hope is that we get a billion-dollar settlement in one of the patent-settlement, pay-for-delay cases,” Ms Feinstein said, giving no indication any settlement was imminent. The FTC’s long-running lawsuits are not close to going to trial.

Defendants in the lawsuits include Solvay Pharmaceuticals, owned by AbbVie; Actavis, previously Watson Pharmaceuticals; Paddock Laboratories, part of Perrigo; Par Pharmaceutical Companies; and Cephalon, owned by Teva.

Generic drugmakers like the “pay for delay” arrangements because if they bring out their products before patent-infringement litigation is over, they run the risk of paying triple damages on sales. – (Reuters)