US FTC long-awaited final report finds brand-name firms use leverage of authorized generic entry to delay competition

The USA’s Federal Trade Commission this week issued its final report, titled Authorized Generic Drugs – Short-Term Effects and Long-Term Impact, which has been in the works for years since it was requested in 2005 by several members of Congress. The massive (270 pages in all) final report follows up on the FTC’s June 2009 interim report.

The final report found that, between fiscal year 2004 and FY 2010, around 25% of patent settlements with first-filing generics - involving drugs with a total market value of more than $23 billion - involved explicit agreements by the brand not to launch an authorized generic to compete against the first-filer, combined with an agreement by the first-filer to defer entry. In FY 2010, nearly 60% of final settlement agreements with first-filing generic firms that contained both compensation to the generic and a restriction on generic entry included explicit agreements that the brand would not market an authorized generic competitor, the FTC stated.

Attack on patent settlements, says PhRMA