Generic-drug industry weighs in on patent settlement case

The trade group representing generic drugmakers said Thursday that lawmakers should rethink their efforts to restrict patent settlements in light of a federal court's decision this week.

The U.S. Court of Appeals for the Second Circuit denied a full hearing in the case of a patent settlement concerning the antibiotic drug Cipro.

The Generic Pharmaceutical Association (GPhA) said the decision provides "a clear sign that the FTC's [Federal Trade Commission] position that patent settlements are anti-competitive, anti-consumer is fatally flawed."

Senate appropriators in late July voted to vote limit generic drugmakers receiving cash settlements in patent disputes with brand-name drugs. Sens. Herb Kohl (D-Wis.) and Chuck Grassley (R-Iowa) have championed the "pay-for-delay" legislation that would allow settlement agreements only when the drug companies can prove to a judge by clear and convincing evidence that the deal won't harm competition.

The Congressional Budget Office says the provision would save the government about $2.5 billion over 10 years, and the FTC has estimated it would save consumers at least $3.5 billion a year.

"GPhA urges Congress to examine the facts around patent settlements and not base important health policy decisions on rhetoric and half-truths," the statement says. "It is the patent that precludes or delays a generic from coming to market. Settlements have never resulted in delaying generic market entry past patent expiration. Winning drug patent litigation is a 50-50 proposition at best for generic companies. But settling patent litigation is a proven way to assure that affordable generics reach consumers earlier than would otherwise be possible."