Pay-for-delay deals have forced US patients to pay an average of 10 times more than necessary for at least 20 blockbuster drugs, claims a new report.
The deals have kept these drugs off the market for an average five years and as long as nine years, enabling branded drugmakers to make an estimated $98 billion in sales while the generic versions were delayed, says the report, from Community Catalyst and the US Public Interest Research Group (USPIRG), which adds that their findings represent just "the tip of the iceberg."
For example, a pay-for-delay deal kept a generic version of the breast cancer drug tamoxifen off the US market for nine years, while Pfizer made $7.4 billion in sales of its cholesterol-lowerer Lipitor (atorvastatin) in the last year alone of its pay-for-delay deal, it says.
However, the report’s findings have been dismissed by the Generic Pharmaceutical Industry Association (GPhA), which says they are "based on a single, flawed premise - that those generic drug manufacturers that pursue patent challenges would win in court virtually every time."
The reality is that generic makers challenge patents at their own expense and at their own risk, and they win only 48% of the time, which makes litigation to conclusion "a total crapshoot," says the GPhA.
The trade group has this month published its own report which says that patent settlements helped the US health system save $25.5 billion during 2005-2012 and brought generics to market 81 months sooner on average than patent expiry.
The study, conducted for GPhA by the IMS Institute for Healthcare Informatics, also says that $61.7 billion more will be saved if the current level of savings continues through to patent expiry for each of the 33 molecules analysed for the report.
One example is the Lipitor settlement, which IMS estimates will save the US $22 billion over the next four years.
"This is critical for lawmakers to understand, because any further restrictions on settlements will put these savings at risk," said GPhA chief executive Ralph Neas.
Two bipartisan bills have been introduced in the Senate; the Preserve Access to Affordable Generics Act, which declares that pay-for-delay deals are presumed anticompetitive and unlawful, and The FAIR Generics Act, which reduces the incentive for such deals by allowing a second generics firm enter the market if the first takes a pay-for-delay deal.