Sorry, FTC: ‘Pay-for-delay’ isn’t going away
WHAT IT MEANS AND WHY IT’S IMPORTANT This week’s decision by the U.S. Second Circuit Court of Appeals could make political efforts to ban generic-branded patent settlements a lot more difficult.
(THE NEWS: Appeals court upholds decision to OK ‘pay-for-delay’ deals. For the full story, click here)
The Federal Trade Commission in particular, not to mention some members of Congress like Sen. Herb Kohl, D-Wis., has fought hard against so-called “pay-for-delay” settlements between branded and generic drug companies, contending that they delay patients’ access to generic drugs and cost consumers billions of dollars every year.
The concerns of opponents are understandable. Because generic and branded drug makers are supposed to be competitors, what seem on the surface like sweetheart deals must look positively Faustian to many people. But the judges in the appeals court affirmed that whatever their appearance, patent settlements don’t violate antitrust laws.
And the facts seem to support that decision. According to a report released in January by RBC Capital Markets, generic drug companies prevailed in 76% of cases that included settlements, but only in 48% of cases that went to trial. Meanwhile, according to a report released the same month by securities and investment banking firm Jefferies & Co., on average, patent settlements result in generic launch three years before patent expiration. Legally, a generic drug company must launch its version of a drug before or at the time of patent expiration.
While patent settlements often involve some type of monetary transaction, in many cases, the “pay” is in the form of a promise by the branded drug company not to launch an authorized generic, which is the branded drug sold under its generic name at a lower price. Under the Hatch-Waxman Act, the first generic drug maker to launch a knockoff of a branded drug is entitled to six months in which to compete directly with the branded version, but the authorized generic allows the branded drug maker to undercut the generic drug maker by marketing a supposedly “generic” version of its own.
Authorized generics have seen a bit of a pickup as well, and more activity on that front can be expected. On Tuesday, Greenstone, the generics arm of Pfizer, announced that it would create a new business called the Authorized Generics Alliance in order to market authorized generics under the Greenstone label.
Abbott acquires Piramal’s Healthcare Solutions business
ABBOTT PARK, Ill. Abbott has gained a foothold in the Indian drug market through its acquisition of the Healthcare Solutions business from Piramal, Abbott said.
Abbott announced Wednesday that it had completed its acquisition of the business, saying it would further accelerate its growth in emerging markets, which currently account for more than 20% of its sales. The company expects its pharmaceutical sales in India to be more than $2.5 billion by 2020.
“The acquisition of Piramal’s Healthcare Solutions business further strengthens Abbott’s growing presence in emerging markets,” Abbott chairman and CEO Miles White said. “Piramal’s portfolio of well-known, trusted products has served patients in India for decades.”
Shire, Acceleron Pharma ink development deal
CAMBRIDGE, Mass. British drug maker Shire is working with Cambridge, Mass.-based Acceleron Pharma to develop treatments for serious muscular disorders, Shire said Thursday.
The drug maker announced that the two companies would investigate ACE-031, a drug in mid-stage clinical trials as a treatment for Duchenne muscular dystrophy, a rare and fatal muscle disorder with no current treatment. The drug belongs to a class known as activin receptor type IIB, or ActRIIB molecules.
The two companies will work together to advance ACE-031 into a global phase-2 and -3 clinical program designed to demonstrate disease modification in patients with DMD.
Under the agreement, Shire will pay Acceleron $45 million upfront, and the latter company will be eligible for milestone payments of up to $453 million for ACE-031 and other molecules. If the drug manages to win regulatory approval, Acceleron will have rights to commercialize it in the United States and Canada, while Shire will have rights in other countries.