The Cross-Border Biotech Blog

Biotechnology, Health and Business in Canada, the United States and Worldwide

Tag Archives: pay-for-delay

Even More Antitrust Scrutiny Pending for Pay-for-Delay Generics Deals

The U.S. Federal Trade Commission published a report today (subtly) entitled “Pay-for-Delay: How Drug Company Pay-Offs Cost Consumers Billions” claiming that settlements between patentees and potential generic entrants where the generic manufacturer is compensated result in delays averaging 17 months longer than the delays in settlements where no compensation is paid. 

“Pay for Delay” is the top “Hot Topic” on the FTC’s homepage, and appears to be getting a lot of attention from Bureau of Competition Director Richard Feinstein: this is is the FTC’s second report on the topic since 2009, and the reports have been accompanied by Congressional testimony, two active cases and “multiple” investigations.

Add to this the announcement by the European Commission this week that it is also investigating these deals, with GSK and AstraZeneca confirming requests for information, and it’s clear the global regulatory heat on these settlements in being turned up.  So far, though, the EU statements are more moderate, with European Competition Commissioner Neelie Kroes reportedly saying only: “We need to monitor this type of agreement in order to better understand why, by whom and under which conditions they are concluded.”

Some more details from the reports:

  • The FTC study looked at 218 final settlements between 2004 and 2009, of which 66 involved “some form of compensation” (the FTC counts non-cash consideration, like agreement not to launch authorized generics, in this group).
  • The EU cites a similar 25% of 200 examined cases where payments were made.
  • The latest FTC report doesn’t provide the primary data, but their analysis shows that “there is less than a 1% chance that this large a difference in average time to entry would be observed if the amount of delay from the two types of agreements were drawn from the same statistical distribution.”
  • The FTC report weights the analysis by the amounts of the annual sales of the applicable drugs, but it says that the “distribution of annual sales figures for drugs covered by these pay-for-delay agreements is not discernibly different from the distribution of annual sales figures for drugs covered by agreements that restrict generic entry with no payment to the generic.”

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FTC Weighs In: Favors Compromise on Biosimilars Exclusivity, Disfavors Pay-For-Delay

The FTC released a report today that explores the economics of biosimilars’ market entry and competition.  It predicts that biosimilars will be priced only 10 to 30% under their corresponding pioneer biologics; and that pioneer biologics will retain 70-90% of their market share subsequent to biosimilar market entry. 

Based on these predictions, the FTC concludes that the proposed 12-14 year exclusivity period (here’s looking at you, Eshoo-Barton) is “too long.”  I’m sticking with my guess that we see a compromise from Waxman on the exclusivity period, landing around 8-10 years.

The report also reiterates the FTC’s opposition to pay-for-delay deals and corresponding support for H.R. 1706.

P.S. The InVivo blog says there’s convergence on “biosimilars” over  “generic biologics” and “follow-on biologics” as the nomenclature of choice (presumably “subsequent-entry biologics” loses too), so I’m running with it.

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