Real World Evidence Evidence & Data Partnerships

Oct 14, 2014 - Oct 15, 2014, Bethesda

This year real patient data will change healthcare.

Pay-for-Delay Deals could be Essential for More Generics and Cheaper Medicines

Limiting pay-for-delay deals will reduce pharmaceutical investment in generics and increase the cost of medicines for patients, states global economic consulting firm.



This week, Compass Lexecon released ‘The Benefits of Patent Settlements: New Survey Evidence on Factors Affecting Generic Drug Investment’, which demonstrates that drug manufacturers producing new generic medicines are influenced by the ability to settle patent litigation. This report comes at a time when the US Senate Judiciary Committee’s Subcommittee on Antitrust, Competition Policy and Consumer Rights has organised a hearing on reducing settlement options for generic drug manufacturers who seek patent challenges.

Senior manager of Compass Lexecon and former economic policy advisor on President Clinton’s National Economic Council Jonathan Orzag said, “For too long, the policy debate has ignored how patent settlements with consideration affect incentives of brand and generic pharmaceutical manufacturers to develop critical medicines.

Patent litigation is already expensive and risky. Restricting the options for settling patent litigation reduces the ability of generic manufacturers to settle these cases, and increases that cost and risk. This, in turn, lowers manufacturers’ incentives to bring generic drugs to market.” 

This study involved an economic analysis and surveyed 14 members of the US Generic Pharmaceutical Association (GPhA) who represent 85% of the generics market. Findings stated that settlement is a vital option for resolving patent litigation as generic manufacturers highlight that 64% of patent suits have been determined by pay-for-delay deals.

As well as the ability to settle patent litigation being a significant factor for investment in a new generic drug, these pharmaceutical manufacturers stated that a challenge of a brand patent would depend on its type, strength and market size. Additionally, these participants were also attracted by the likelihood of a ‘first filer opportunity’ which is a legal incentive to file challenges early so as to benefit from potential 180-day market exclusivity. 

The support for patent settlements is strengthened by an earlier IMS study, on behalf of the GPhA, which indicated that generic medicines which were launched before patent expiration, by way of a settlement, helped the US health system save $25.5 billion from 2005 – 2012. Both studies give an indication of how cost-effective patent settlements can be for future years.     

President and chief executive of the GPhA Ralph Neas comments on the usefulness of the Compass Lexecon report saying, “For the first time since 1957, spending on prescription drugs in America has dropped, largely due to the widespread availability and use of generic medicines.

The Hatch-Waxman law encourages generic competition and works extraordinarily well, with generic medicines now comprising 84% of prescriptions dispensed. This paper offers more evidence of the wisdom of preserving the current system, including patent settlements with consideration. Limiting settlement options will actually drive down investment in generics and drive up the cost of medicine for patients.”



Real World Evidence Evidence & Data Partnerships

Oct 14, 2014 - Oct 15, 2014, Bethesda

This year real patient data will change healthcare.