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FTC Finds diminishing Number of Anticompetitive Reverse Payment Deals

The Federal Trade Commission (FTC) on 23.05.19 released a report on Hatch-Waxman patent settlements in FY 2016 highlighting a hike in the total settlements cases and yet a sizeable decrease in anticompetitive reverse payment settlements.

Additionally, FTC discovered that merely 1 of the 232 agreements between generic and brand drug companies in the year 2016 contained a side deal also called no authorized generic commitment. This has been the lowest number of such pay-for-delay agreements since the year 2004.

Still, total number of settlements with the limited restrictions on generic entry and remuneration has more than doubled from 14 in 2015 to 30 in 2016. Of the total 30 agreements, 29 agreements contained payments in the name of litigation fees.

Additionally, 65% (151 of the 232) of the total settlements since 2016 prevented the generic manufacturer’s capability to market and sell its product without any explicit or expected compensation.

The number of settlements with the restrictions on generic entry and renumeration for first generic filers also increased from 7 to 16 between 2015-16.

FTC also unearthed that 13 settlements were regarding generic drug-makers that went ahead to launch their products despite risk and were launched before resolving outstanding patent dispute/lawsuits. And each one of the 13 settlements related to such risky launches allowed the generic manufacturer to continue marketing its product but mandated that the generic firm pay the brand manufacturer damages for the risky sales.

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