Drug Industry Daily
July 10, 2013
Patent settlements between brand and generic drugmakers are not anticompetitive, and in fact are "procompetitive and proconsumer," Ralph Neas, president and CEO of GPhA said Tuesday, adding that an IMS Institute for Healthcare Informatics report released the same day proves just that.
Generic drugs launched prior to patent expiration due to a patent settlement helped the U.S. health system save $25.5 billion between 2005 and 2012 and brought generic medicines to market on average 81 months sooner than patent expiry, according to the IMS report, Impact of Patent Settlements on Drug Costs: Estimation of Savings.
The government, however, has publicly questioned the nature of such deals, especially those involving some sort of cash payout to generic companies for delaying the release of a copycat drug. The FTC argues the so-called "pay-for-delay" deals cost Americans $3.5 billion annually by delaying generic entry an average 17 months longer than deals that do not include a payment.
In June, the Supreme Court rejected the government's claim that patent settlements are presumptively anticompetitive, but also ruled they could not be deemed lawful for operating within the scope of a patent, as the pharmaceutical industry has claimed.
Such agreements should be evaluated on a case-by-case basis under a longstanding antitrust test known as the "rule of reason," the court ruled in FTC v. Actavis.
"The rule of reason is workable," Neas said on a conference call announcing the report, which was commissioned by GPhA. "We believe in the legal arena and the congressional arena, this study will be extremely important."
The Supreme Court ruling still leaves the burden of proof on the government, he said, "exactly where it should be." But, Neas added, the study shows that the federal government benefits from almost one-third, or $8.3 billion, of these savings.
The IMS study analyzed a set of 33 molecules subject to patent settlements between 2005 and 2012 and measured the savings resulting from lower-cost generics entering the market in advance of each molecule's patent expiration date, as recorded in the FDA's Orange Book.
Read the full report at http://www.gphaonline.org/gpha-media/gpha-resources/impact-of-patent-settlements-on-drug-costs-estimation-of-savings
Patent settlements between brand and generic drugmakers are not anticompetitive, and in fact are "procompetitive and proconsumer," Ralph Neas, president and CEO of GPhA said Tuesday, adding that an IMS Institute for Healthcare Informatics report released the same day proves just that.
Generic drugs launched prior to patent expiration due to a patent settlement helped the U.S. health system save $25.5 billion between 2005 and 2012 and brought generic medicines to market on average 81 months sooner than patent expiry, according to the IMS report, Impact of Patent Settlements on Drug Costs: Estimation of Savings.
The government, however, has publicly questioned the nature of such deals, especially those involving some sort of cash payout to generic companies for delaying the release of a copycat drug. The FTC argues the so-called "pay-for-delay" deals cost Americans $3.5 billion annually by delaying generic entry an average 17 months longer than deals that do not include a payment.
In June, the Supreme Court rejected the government's claim that patent settlements are presumptively anticompetitive, but also ruled they could not be deemed lawful for operating within the scope of a patent, as the pharmaceutical industry has claimed.
Such agreements should be evaluated on a case-by-case basis under a longstanding antitrust test known as the "rule of reason," the court ruled in FTC v. Actavis.
"The rule of reason is workable," Neas said on a conference call announcing the report, which was commissioned by GPhA. "We believe in the legal arena and the congressional arena, this study will be extremely important."
The Supreme Court ruling still leaves the burden of proof on the government, he said, "exactly where it should be." But, Neas added, the study shows that the federal government benefits from almost one-third, or $8.3 billion, of these savings.
The IMS study analyzed a set of 33 molecules subject to patent settlements between 2005 and 2012 and measured the savings resulting from lower-cost generics entering the market in advance of each molecule's patent expiration date, as recorded in the FDA's Orange Book.
Read the full report at http://www.gphaonline.org/gpha-media/gpha-resources/impact-of-patent-settlements-on-drug-costs-estimation-of-savings