Merck's Patent Cliff May Grow Closer, And Steeper -- FTC Sniffing Around Various Generic Delay Deals

This is sort of a "two-fer" post, along with last night's post. Overnight, The New York Times is running a good story on FTC and House efforts to curtail "Pay to Delay" generic drug deals -- here's a snippet -- but do go read it all; much more of value there:

. . . .Drug companies entered into 19 settlement agreements in fiscal year 2009 that involved both delaying generic entry and compensation from the brand to the generic compared to no such agreements in fiscal year 2004, according to an F.T.C. report to be published on Wednesday. Settlement deals in which generic makers received compensation typically kept generics off the market for 17 months longer than deals without payments, the report says. . . .

What I find surprising -- in its transparently specious approach -- is Senator Orrin Hatch's (R, Big Pharma) argument in favor of all such deals, in the Times article. [Sadly, the Times runs it without an opposing comment from an FTC staffer.] The Senator from Big Pharma (by way of Utah) suggests that even the "Pay to Delay" deals get generics to market "before" the last of the patents on the branded drugs expire. While true on its face, that argument disingenuously ignores an obvious probability.

The Senator conveniently fails to note that many of these patents are continuations, and thus are very weak, legally -- to begin with. If the generics companies were to move forward and manufacture, in many of these cases, it is likely that a judge would either hold the branded (narrow) patent was not infringed by the generic manufacturer, of would hold the patent invalid altogether (for obviousness, or double patenting, for example).

Either way, the generic drug would be "on market" years earlier -- saving consumers billions, over those several additional years of head-to-head competition.

Oh yeah. Credit Suisse upgraded Merck this morning. Yawn.