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FTC Continues to Mislead Consumers on Pro-Consumer Patent Settlements

WASHINGTON, D.C. (AUGUST 31, 2011) – Generic Pharmaceutical Association (GPhA) Executive Director Bob Billings today made the following statement in response to the Federal Trade Commission’s (FTC) report on authorized generics and patent settlements.

“By continuing to push its misguided policy to ban pro-consumer patent litigation settlements, the FTC is gambling with consumers’ savings,” Billings said.

According to an analysis by RBC Capital Markets, over the past decade, consumers gained access to lower cost generic prescription drugs prior to the brand patents expiring in 76 percent of the 370 patent litigation cases. But picking out only those non-settled cases that were litigated to conclusion, consumers gained access to generics before patent expiration in just 48 percent of the patent challenges.

“It’s the patent, not the patent settlements that holds up the launch of a generic drug,” Billings said. “Patent settlements have never prevented competition beyond the patent expiry, and generally have resulted in making lower-cost generics available months and even years before patents have expired.”

This year, 17 of the expected 23 new generic drug launches — including the generic versions of Lipitor® and Plavix® — will be the result of patent settlements. As the RBC analysis noted, of the 370 drug patent challenges in the 10-year period 2000-2009, generic companies prevailed in only 48 percent of those cases that were litigated to conclusion. As a result, consumers gained access to lower cost generics prior to the brand patent expiring in less than half of the non-settled cases.

When factoring in cases that were settled, however, the generic drug was launched prior to patent expiration in 76 percent of all patent challenges. Using this data, it is reasonable to conclude that had a ban on patent litigation settlements been in place over the past 10 years, up to 100 of the approximately 280 first-time generics launched between 2000 through 2009 would have been delayed until the expiration of the brand patent.

GPhA represents the manufacturers and distributors of finished generic pharmaceuticals, manufacturers and distributors of bulk pharmaceutical chemicals, and suppliers of other goods and services to the generic industry. Generic pharmaceuticals fill 78 percent of the prescriptions dispensed in the U.S. but consume just 25 percent of the total drug spending. Additional information is available at gphaonline.org.

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