Media

Press Release

GPhA: FTC’s Flawed Understanding of Patent Settlements Misleads Consumers

Washington, D.C. (May 3, 2011) – The Generic Pharmaceutical Association (GPhA) today issued the following response to the Federal Trade Commission’s staff report on patent settlements.

“The FTC is continuing to perpetuate the myth that pro-competitive, pro-consumer patent settlements are harmful to consumers — an unsubstantiated position that has repeatedly failed to receive support in both Congress and the Courts.”

“Patent settlements have never prevented competition beyond the patent expiry, and generally have resulted in making lower-cost generics available months and even years before patents have expired.

“And it is important to note that the FTC already has the authority to review and reject any patent settlement that it deems to be unlawful.

“A recent analysis by the Royal Bank of Canada (RBC) found that the ability to settle patent challenges dramatically increases opportunities for consumer savings. The RBC analysis demonstrated that in cases where companies litigated to a conclusion, generic medicines came to market prior to patent expiration in only 48 percent of cases. In those cases where settlements resulted, generics came to market prior to patent expiration in 76 percent of cases.

“Furthermore, an August 2010 analysis conducted by Jonathan Orszag, former Director of the Office of Policy and Strategic Planning and member of President Clinton’s National Economic Council, concluded that the Congressional Budget Office (CBO) used faulty assumptions to support its own estimate of the savings a ban on settlements would bring.

“Instead of concentrating their efforts on banning these pro-competitive settlements, those in Washington should focus on initiatives that would continue to dramatically reduce prescription drug spending; namely, promoting the increased utilization of generics for federal and state government funded health care programs and accelerating the approval of more affordable generics by increasing funding for the Office of Generic Drugs.”

GPhA represents the manufacturers and distributors of finished generic pharmaceuticals, manufacturers and distributors of bulk pharmaceutical chemicals, and suppliers of other goods and services to the generic industry. Generic pharmaceuticals fill 75 percent of the prescriptions dispensed in the U.S. but consume just 22 percent of the total drug spending. Additional information is available at gphaonline.org.

– 30 –

• More press releases
• Other resources in Patent Settlements