On April 24th, the Federal Trade Commission’s Bureau of Competition issued a summary of agreements filed with the Commission in fiscal year 2005 (ending September 30, 2005) by generic and branded drug manufacturers. The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 requires drug companies to file certain agreements with the FTC and the U.S. Department of Justice. The summary provides information regarding the 20 agreements that were filed with the FTC in FY 2005, involving 16 different products. It also compares FY 2005 data with those received in FY 2004 and with findings of the Commission’s 2002 study entitled “Generic Drug Entry Prior to Patent Expiration.”
For the first time since 1999, brand and generic companies are entering settlements in which the generic receives compensation from the branded manufacturer and there is a restriction on the generic’s ability to market its product. Based on the information reported in the Commission’s 2002 study and on settlements reported between 1999 and 2004, no patent settlements included both compensation to the generic and a restriction on the generic’s ability to market its product. In contrast, three settlements submitted in FY 2005 included those terms. The other highlights of the summary are that 1) 11 of the 20 agreements filed in FY 2005 were final settlements of patent litigation between a branded and generic company; 2) five were interim agreements that occurred during patent litigation between a brand and a generic company, but did not resolve the litigation; 3) the remaining agreements were between a first-filer generic company and a subsequent generic filer.