Pay-for-Delay: An Unsettled Future Lies Ahead

Date: July 22, 2010
Pages: 36
US$ 395.00
Publisher: FirstWord
Report type: Strategic Report
Delivery: E-mail Delivery (PDF)
ID: P8A4D280248EN

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Pay-for-Delay: An Unsettled Future Lies Ahead
Anti-competitive or just good business?

That’s the question facing the pharmaceutical industry and regulators alike, as companies dealing with drugs going off-patent increasingly rely on pay-for-delay agreements that involve delayed generics market entry in exchange for a value transfer. Avoiding costly, lengthy and complex patent litigation, pay-for-delay deals are undeniably emerging as a trend, but are estimated to cost the payer an annual $3.5 billion.

Direct payment to the generics company is becoming rarer, with unrelated side-deals the form of compensation of choice in both the US and EU. Considered a win-win scenario by both generics and branded industries, the deals are being spurred on by two main factors: the benefit of avoiding expensive and risky litigation for both parties, and the potential gains of extending market exclusivity for the branded company.

How are regulators reacting? No doubt alarmed at the increase in pay-for-delay settlements—none in 2004 and 19 in 2009—the US Federal Trade Commission has begun closely scrutinizing the competitiveness of the arrangements, while the European Commission recently highlighted the deals in its year-long pharma inquiry. While a US ban has yet to be implemented, there is no doubt the issue will come to the forefront in the very near future. Indeed, the House of Representatives recently passed a bill that would allow the Federal Trade Commission to fine companies engaging in anticompetitive deals.

So what is the future of reverse-payment deals?

In Pay-for-Delay: An Unsettled Future Lies Ahead, FirstWord examines the current pay-for-delay environment by delving into the deals, the major players and the factors driving the trend. The report offers insights into the present regulatory environment, company strategy and how the US and European markets differ. Backed by solid statistical and analytical reporting, the dossier also gives readers a full breakdown of patent litigation and settlements across two continents, and identifies which companies are likely to win--and which to lose.

The report offers insights into
  • Why pay-for-delay agreements are evolving as they are
  • Why a ban failed to make it into US healthcare reform legislation, and what the future of regulation may hold

The report
  • Examines the current state of pay-for-delay agreements in the US and Europe
  • Reviews which companies are engaging most actively in the deals, and which are litigating
  • Includes statistics, charts and insight into how pay-for-delay deals are taking shape
  • Reviews strategies used by generics and branded companies
  • Provides an overview of potential regulatory changes


Pay for delay defined
  A form of settlement agreement
  Anti trust issues
  The drivers for settlement
Form of compensation to the generics company
  Compensation to the generics company in the US
  Compensation to the generics company in Europe
  Authorized generics as key differentiator between the US and Europe
Company strategy and pay for delay
  The branded view
  The generic view
  Apotex strikes out against pay for delay


Pay for delay settlements in the US, fiscal year 2008
2005 ruling boosts pay for delay settlements in the US
A recent change in stance for the US judicial system
...but not quite enough for the FTC
A legislative solution may be an alternative
…but was not included in US healthcare reform legislation
FTC takes matters into its own hands


Fragmented European market impacts settlement decisions
Pay for delay agreements highlighted by European Commission
Increasing incidence of settlements in Europe
Pay for delay settlements in Europe

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