The number of deals struck between branded and generic drugmakers to keep generic competition off the US market rose an "unprecedented" 60% in FY2010, says the Federal Trade Commission (FTC).

There were 19 such deals in FY 2009 but 31 in FY 2010 (October 1, 2009-September 30, 2010), and the agreements reached in the latest fiscal year involved 22 different brand-name pharmaceutical products with combined annual US sales of around $9.3 billion, according to a new report from the Commission.

And it estimates that such settlements that include a payment delay generic entry by an average of 17 months longer than those that do not include a payment.

"Collusive deals to keep generics off the market are already costing consumers and taxpayers $35 billion a year in higher drug prices," said FTC chairman Jon Leibowitz, who has long called for pay-for-delay agreements to be banned. "The increasing number of these deals is a win-win proposition for the pharmaceutical industry, but a lose-lose for everyone else," he added.

The Commission report summarises data on patent settlements filed with the FTC and the Department of Justice during FY2010. During the year, it says there was a total of 113 final patient settlements, 31 of which contained a payment to a generic drugmaker and also restricted the firm's ability to market its generic drug. 

Of those 31 settlements, 26 involved "first-filer" generics, ie, they were the first to seek FDA approval to market a generic version of the branded drug. The regulatory framework means that when first-filers delay entering the market, other generic manufactures can also be blocked from entering the market; this makes such patent settlement deals particularly harmful to consumers, says the FTC.

The report also cites three other settlements during the year that did not record any explicit compensation for the generic but did provide other assurances which may, it says, "have had the effect of compensating the generic for delaying entry."

The FTC report was attacked by the Generic Pharmaceutical Association (GPhA), the generic drugmakers’ trade group, for "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, says the GPhA, adding: "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."