The Waning Days -- Of "Pay For Delay" In Branded "Buddied Up With" Generic Pharma -- Draw Nigh?

The US FTC is letting it be known that it has begun a novel 10 year post hoc look back (literature and data review, in point of fact) study -- involving most large patent settlements -- for anticompetitive effects. [2009 era backgrounder, here. And a more recent one, here.]

The FTC has seen its spinnaker sails filled with a fresh northerly gale, now that the Supremes have agreed that such settlements violate US antitrust law, if a substantial anticompetitive effect can be demonstrated. Here is a Bloomberg version of this widely circulating story, from yesterday:

. . . .The Federal Trade Commission has opened new investigations into agreements between generic and brand-name drugmakers that may lead the agency to sue for disgorgement of revenues, said Markus Meier, head of the agency’s health-care division. Companies under scrutiny include Forest Laboratories Inc. and Endo International Plc, according to regulatory filings this year.

“Our goal is to bring an end to this practice by whatever means are available to us,” Meier said in an interview.

The agency says its enforcement efforts gained strength last June when the Supreme Court ruled antitrust law may bar deals in which brand-name drugmakers compensate generics producers for delaying sales of a particular medication. . . .

With its powers enhanced by the Supreme Court decision, the FTC opened new investigations, Meier said, declining to provide details of the probes. The agency also decided to look at patent settlements between branded and generic drug manufacturers over the past 10 years to see if they warrant a deeper probe for anticompetitive effects, he said. . . .

So, new Merck ought to be a little concerned that legacy Schering-Plough payments (aggregating into the high hundreds of millions of dollars) in such "settlements" -- like those made with Sun, Teva, Mylan and Lupin -- on drugs like Cozaar^®, Claritin^®, K-Dur^®, Temodar^® and Zetia^®, among many others, may be at risk for a look back enforcement proceeding, in the relatively near future.

And certainly, all future such deals will face heightened FTC scrutiny. Bank on that -- the "by all means available" quote above indicates a rather aggressive level of zeal. By some 2010 estimates, US consumers might save $130 billion (yes, that's a "B") (in the aggregate) on their prescriptions, if all the delay payments were effectively outlawed.