Corporate & Securities Law

Reverse Payment Settlement Ban Struck From Health Care Bill

By David Fischer

The BLT (The Legal Times’ blog) reports that a provision banning such settlement was struck from the House bill (it was not in the Senate version):

The measure, which was backed by the Federal Trade Commission, would in most cases have barred so-called “pay for delay” settlements of patent cases brought by generic companies against brand-name drug makers. In such cases, the brand name maker pays the generic company to delay the market entry of a lower-cost generic drug alternative.

The FTC estimated that such reverse payment deals cost consumers $3.5 billion per year. But the provision in the House version of the health care bill was unpopular with both generic and brand name drug companies. (The Senate bill does not include it.)

?Imposing a ban on patent settlements would have the unintended consequence of preventing pro-consumer settlements that would actually allow generic competition sooner than if the generic company had taken the case to its conclusion and lost?always a possibility in patent litigation,? said Kathleen Jaeger, president of the Generic Pharmaceutical Association, in a statement.

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Full post as published by Antitrust Review on March 18, 2010 (boomark / email).