Dept. of Justice speaks out against ‘pay-for-delay’ deals

WASHINGTON The Department of Justice has come out against so-called “pay-for-delay” deals between branded and generic drug companies, according to published reports.

The DOJ’s antitrust division asserted in a court filing that patent settlements between branded and generic drug companies in which branded drug manufacturers pay generic manufacturers not to challenge their patents should be considered illegal, according to The Wall Street Journal. The DOJ further asserted the deals should be considered legal only when it can be demonstrated that they don’t stifle competition.

Such settlements have attracted controversy, with the Federal Trade Commission and now the DOJ saying they prevent competition, while the generic drug industry asserts that the settlements ensure generic drugs make it to market in a timely fashion, thus promoting competition. Generic drug companies often use the settlements to persuade branded drug companies not to release “authorized generics” – branded drugs sold under their generic names – during the 180-day period when a generics company has the exclusive right to market the generic version of a drug.