Letter to Edith Ramirez, Chairwoman of the Federal Trade Commission - Urging Release of Data on Pay-for-Delay Settlements

Letter

Dear Chairwoman Ramirez:

We are writing to request the prompt release of the 2013 fiscal year staff report on agreements filed with the Federal Trade Commission under the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, as well as a timely 2014 fiscal year staff report.

Since 2004, the Federal Trade Commission has released annual reports summarizing agreements between brand and generic medical manufacturers, providing important information on the use of pay-for-delay provisions in patent dispute resolutions. Pay-for-delay agreements, monetary settlements made by brand name drug companies to generic drug companies in exchange for delaying the marketing of generic competitors, deny consumer access to more affordable alternatives to brand medications. The FTC estimated that these anticompetitive deals result in consumers and taxpayers paying an additional $3.5 billion in higher drug costs every year.

It is critical to have access to these numbers in order to better understand the impact of "pay-for-delay" agreements. In July 2013, the Judiciary Committee Subcommittee on Antitrust, Competition Policy, and Consumer Rights held a hearing on pay-for-delay deals where Chairwoman Ramirez stated that this issue is a top priority for the agency. We applaud the efforts of the Federal Trade Commission to make this agreement information available, and seek your continued input on the matter. Having up-to-date numbers is an important part of developing legislation that would curb this anticompetitive behavior.

It is also important to understand how the 2013 Supreme Court case FTC v. Actavis has impacted patent dispute resolution, as well as the steps the FTC has taken since the decision to challenge pay-for-delay settlements. While the decision made clear that these agreements are subject to antitrust scrutiny, you have stated that the litigation is both time and resource intensive, and lacks a bright line standard. Your numbers from the 2012 staff report showed a dramatic increase in the number of these pay-for-delay agreements; release of the 2013 and 2014 numbers will help Congress understand whether the Court's decision has altered the behavior of drug manufacturers, and what legislative reforms are currently needed.

We look forward to working with you to protect consumers and encourage competitive behavior in the medication marketplace.

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