FTC wants to ban 'pay-to-delay' settlements related to generic drugs

The Associated Press/USA Today: "The Federal Trade Commission says patent settlements between drugmakers that cost U.S. consumers billions each year are on the rise. The agency reported Wednesday that the number of lucrative settlements between brand-name and generic drug companies rose to 19 last year from 16 in 2008 and 14 the year before."

For the past year, the FTC has been campaigning "against so-called "pay-to-delay" settlements, in which a branded drug company rewards a generic competitor for keeping cheaper versions of its drugs off the market."  FTC officials say the deals costs Americans $3.5 billion annually in higher drug costs, but "(r)epresentatives for both branded and generic drug industries have argued that patent settlements are a useful way to resolve costly litigation which would otherwise delay drug launches even longer." FTC leaders are currently lobbying for inclusion of a ban on such practices to be put into the health care reform bill. The Congressional Budget Office says the move could save the government $1.8 billion in spending over the next 10 years (Perrone, 1/13).