FTC Report on Drug Company "Pay-for-Delay" Agreements
The Federal Trade Commission has released a “staff study” entitled “Pay for Delay: How Drug Company Pay-Offs Cost Consumers Billions.” The report examines agreements in patent litigation settlements in which a brand-name pharmaceutical company compensates a generic pharmaceutical company for delays in generic entry. According to the study, over the past six years, such agreements delayed generic entry by an average of 48 months. Over the next 10 years, the study concluded that pay-for-delay agreements will cost American consumers an estimated $35 billion ($3.5 billion per year). While the FTC intends to continue litigating pay-for-delay cases under antitrust laws, the report contends that “a legislative solution offers the quickest and clearest way to deter these agreements and obtain the benefits of generic competition for consumers.”
