Skip to main content
Sister Publication Links
  • ESG: THE NEW IMPERATIVE
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Current News
    • COVID-19
    • Providers
    • Insurance
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • Transformation
    • People
    • Regional News
    • Digital Edition (Web Version)
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • Midwest
    • Northeast
    • South
    • West
  • Digital Health
  • Insights
    • ACA 10 Years After
    • Best Practices
    • Special Reports
    • Innovations
  • Opinion
    • Bold Moves
    • Breaking Bias
    • Commentaries
    • Letters
    • Vital Signs Blog
    • From the Editor
  • Events & Awards
    • Awards
    • Conferences
    • Galas
    • Virtual Briefings
    • Webinars
    • Nominate/Eligibility
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • Best Places to Work in Healthcare
    • Excellence in Governance
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top 25 Emerging Leaders
    • Top 25 Innovators
    • Diversity in Healthcare
      • - Luminaries
      • - Top 25 Diversity Leaders
      • - Leaders to Watch
    • Women in Healthcare
      • - Luminaries
      • - Top 25 Women Leaders
      • - Women to Watch
    • Digital Health Transformation Summit
    • Leadership Symposium
    • Social Determinants of Health Symposium
    • Women Leaders in Healthcare Conference
    • Best Places to Work Awards Gala
    • Health Care Hall of Fame Gala
    • Top 25 Diversity Leaders Gala
    • Top 25 Women Leaders Gala
    • - Hospital of the Future
    • - Value Based Care
    • - Supply Chain
    • - Hospital at Home
    • - Workplace of the Future
    • - Digital Health
    • - Future of Staffing
    • - Hospital of the Future (Fall)
  • Multimedia
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Video Series - The Check Up
    • Sponsored Video Series - One on One
  • Data Center
    • Data Center Home
    • Hospital Financials
    • Staffing & Compensation
    • Quality & Safety
    • Mergers & Acquisitions
    • Data Archive
    • Resource Guide: By the Numbers
    • Surveys
    • Data Points
  • MORE +
    • Contact Us
    • Advertise
    • Media Kit
    • Newsletters
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Breadcrumb
  1. Home
  2. Government
January 14, 2016 12:00 AM

'Pay-for-delay' deals protecting branded drugs are falling

Lisa Schencker
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    The number of deals between drug companies meant to delay sales of less expensive generic drugs dropped significantly in fiscal 2014 after the U.S. Supreme Court made it easier to challenge such agreements, the Federal Trade Commission said this week.

    But that doesn't necessarily mean it's time for the FTC to declare victory when it comes to the battle over drug prices. Rather, drug companies are still using a number of other tactics to stave off competition for their branded products.

    In fiscal 2014, the number of so-called pay-for-delay deals filed with the FTC dropped to 21 from 29 the year before and from 40 in fiscal 2012, according to the FTC report (PDF). In pay-for-delay cases, brand-name drugmakers pay settlements to generic drugmakers in patent disputes to keep cheaper generic drugs off the market. The deals are also known as reverse payments.

    The slide in such agreements follows a 2013 Supreme Court decision in FTC v. Actavis that made it easier to challenge them under federal antitrust law. In May, the FTC scored a $1.2 billion settlement from drugmaker Teva Pharmaceuticals over allegations that a company it acquired delayed a generic version of its popular sleep-disorder drug Provigil from entering the market.

    “Although it is too soon to know if these are lasting trends, it is encouraging to see a significant decline in the number of reverse payment settlements,” Debbie Feinstein, director of the FTC's Bureau of Competition, said in a statement.

    Lisl Dunlop, a partner at the law firm Manatt, Phelps & Phillips, said the drop in the number of pay-for-delay settlements shows the FTC's success in its long-running campaign against the practice.

    But she cautioned that it's “not the end of the road on drug prices.”

    “The focus on pay-for-delay has forced the drug companies to be more creative,” she said.

    An attempt to reach Pharmaceutical Research and Manufacturers of America, the drug industry's largest trade group, for comment on the report was not immediately successful Thursday.

    Dunlop said drugmakers have been trying other ways of structuring pay-for-delay deals, such as providing generic drugmakers compensation in the form of business transactions, not just direct payments. That was what happened in the Teva case that the FTC successfully challenged.

    But not all courts have come down the same way on that issue, said Michael Carrier, a professor at Rutgers Law School.

    Drugmakers are also using product-hopping, which is when they replace a branded drug with a newer, slightly different branded drug. If they do that before generics become available for the first drug, consumers are forced to switch to the new drug for which no generic will be available for some time.

    In May, a federal appeals court ruled in such a case that Actavis had to continue selling an Alzheimer's drug that it planned to pull off the market and replace with a newer version shortly before generics were to become available for the original drug.

    “They're using an array of tactics,” Carrier said. “In the pharmaceutical industry there is a range of activity that potentially presents anti-competitive conduct.”

    The FTC report released this week, however, shows that the Supreme Court ruling on pay-for-delay deals “woke up the industry to the fact” that the agreements can violate antitrust law, Carrier said.

    Lawmakers have raised questions about drug prices in recent months amid backlash from consumers, insurers and providers over the tide of high-cost specialty drugs and rising prices for many generics. The matter gained notoriety from the now-infamous move by Turing Pharmaceuticals and its CEO, Martin Shkreli, to raise the price of generic drug Daraprim, used to treat toxoplasmosis, from $13.50 to $750 a pill.

    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    Record 16.3M people enroll in ACA plans
    Record 16.3M people enroll in ACA plans
    367749098.jpg
    US health officials propose annual COVID-19 vaccination for most Americans
    Most Popular
    1
    More healthcare organizations at risk of credit default, Moody's says
    2
    Centene fills out senior executive team with new president, COO
    3
    SCAN, CareOregon plan to merge into the HealthRight Group
    4
    Blue Cross Blue Shield of Michigan unveils big push that lets physicians take on risk, reap rewards
    5
    Bright Health weighs reverse stock split as delisting looms
    Sponsored Content
    Modern Healthcare Alert: Sign up for this breaking news email to be kept in the loop as urgent healthcare business news unfolds.
    Get Newsletters

    Sign up for enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today
    MH Magazine Cover

    MH magazine offers content that sheds light on healthcare leaders’ complex choices and touch points—from strategy, governance, leadership development and finance to operations, clinical care, and marketing.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS

    Our Mission

    Modern Healthcare empowers industry leaders to succeed by providing unbiased reporting of the news, insights, analysis and data.

    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Current News
      • COVID-19
      • Providers
      • Insurance
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • Transformation
        • Patients
        • Operations
        • Care Delivery
        • Payment
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition (Web Version)
    • Digital Health
    • Insights
      • ACA 10 Years After
      • Best Practices
      • Special Reports
      • Innovations
    • Opinion
      • Bold Moves
      • Breaking Bias
      • Commentaries
      • Letters
      • Vital Signs Blog
      • From the Editor
    • Events & Awards
      • Awards
        • Nominate/Eligibility
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Excellence in Governance
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top 25 Innovators
        • Diversity in Healthcare
          • - Luminaries
          • - Top 25 Diversity Leaders
          • - Leaders to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Conferences
        • Digital Health Transformation Summit
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Diversity Leaders Gala
        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Supply Chain
        • - Hospital at Home
        • - Workplace of the Future
        • - Digital Health
        • - Future of Staffing
        • - Hospital of the Future (Fall)
      • Webinars
    • Multimedia
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Video Series - The Check Up
      • Sponsored Video Series - One on One
    • Data Center
      • Data Center Home
      • Hospital Financials
      • Staffing & Compensation
      • Quality & Safety
      • Mergers & Acquisitions
      • Data Archive
      • Resource Guide: By the Numbers
      • Surveys
      • Data Points
    • MORE +
      • Contact Us
      • Advertise
      • Media Kit
      • Newsletters
      • Jobs
      • People on the Move
      • Reprints & Licensing