U.S. Wants At Least $1 Billion From Drugmakers Who Delay Generics

March 28, 2014

(REUTERS) – The U.S. Federal Trade Commission seeks 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 on Friday.

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 U.S. market.

untitled (8)In June, the U.S. 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, the 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,” Feinstein responded, giving no indication that any settlement was imminent. The FTC’s long-running lawsuits are not close to going to trial.

“In all truth, that is one of the biggest priorities we have,” she said. “The consumer harm there is extremely significant, and so we have a tremendous amount of resources there and hope to come out with a victory one way or another in those cases.”

Defendants in the lawsuits include Solvay Pharmaceuticals Inc, owned by AbbVie Inc; Actavis, previously Watson Pharmaceuticals; Paddock Laboratories Inc, part of Perrigo Co; Par Pharmaceutical Companies Inc; and Cephalon Inc, 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 if they are found to have infringed.

The FTC shares antitrust authority in the United States with the U.S. Justice Department.