Bureau of Competition Issues FY 2005 Summary of Pharmaceutical Company Settlement Agreements

The Federal Trade Commission’s Bureau of Competition today issued a summary of agreements filed with the Commission in fiscal year 2005 (ending September 30, 2005) by generic and branded drug manufacturers. The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 requires drug companies to file certain agreements with the FTC and the U.S. Department of Justice.

The summary provides information regarding the 20 agreements that were filed with the FTC in FY 2005, involving 16 different products. It also compares FY 2005 data with those received in FY 2004 and with findings of the Commission’s 2002 study entitled “Generic Drug Entry Prior to Patent Expiration.”

For the first time since 1999, brand and generic companies are entering settlements in which the generic receives compensation from the branded manufacturer and there is a restriction on the generic’s ability to market its product. Based on the information reported in the Commission’s 2002 study and on settlements reported between 1999 and 2004, no patent settlements included both compensation to the generic and a restriction on the generic’s ability to market its product. In contrast, three settlements submitted in FY 2005 included those terms.

The other highlights of the summary are that 1) 11 of the 20 agreements filed in FY 2005 were final settlements of patent litigation between a branded and generic company; 2) five were interim agreements that occurred during patent litigation between a brand and a generic company, but did not resolve the litigation; 3) the remaining agreements were between a first-filer generic company and a subsequent generic filer.

Copies of the Bureau’s summary of agreements filed in FY 2005 are available on the FTC’s Web site at www.ftc.gov. The FTC’s Bureau of Competition, in coordination with the Bureau of Economics, seeks to prevent business practices that restrain competition. The Bureau carries out its mission by investigating alleged law violations and, when appropriate, recommending that the Commission take formal enforcement action. To notify the Bureau concerning particular business practices, call or write the Office of Policy and Coordination, Room 394, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave, N.W., Washington, DC 20580, Electronic Mail: antitrust@ftc.gov; Telephone (202) 326-3300. For more information on the laws that the Bureau enforces, the Commission has published “Promoting Competition, Protecting Consumers: A Plain English Guide to Antitrust Laws,” which can be accessed at http://www.ftc.gov/bc/compguide/index.htm.