Eliminating "pay-for-delay" deals would save consumers $3.5 billion a year, FTC chairman says

WASHINGTON Doing away with so-called “pay-for-delay” settlements between branded and generic pharmaceutical companies would save consumers billions of dollars a year, the chairman of the Federal Trade Commission said.

FTC chairman Jon Leibowitz said in a speech before the Center for American Progress in Washington that according to internal analysis by the commission, stopping settlements whereby branded companies pay generic companies to delay releasing potential generic competitors to their drugs would result in $3.5 billion in savings to American consumers every year, as well as savings for the federal government.

“On the one hand, you have savings to American consumers of $35 billion or more over 10 years – about $12 billion of which would be savings to the federal government – and the prospect of helping to pay for healthcare reform as well as the ability to set a clear national standard to stop anticompetitive conduct,” Leibowitz said. “On the other hand, you have a permissive legal regime that allows competitors to make collusive deals on the backs of consumers.”