US Rx pricing, brand/ generic deals viewed

Financial settlements between generic and branded pharmaceuticalcompanies to end patent litigation are not illegal, Willard Tom, the former deputy director of the Federal Trade Commission and now with Morgan, Lewis and Bockius, has told a press briefing sponsored by the Washington Legal Foundation.

Disagreeing with a court decision holding such deals to be illegal "per se," he stressed the FTC's ability to evaluate each one individually, saying it takes account of the particular merits involved and the need to maintain incentives for innovator companies.

Higher drug costs and declining generics use are related directly to a buildup of intellectual property protections for branded drugs through a series of laws passed in the late 1980s and the 1990s, said Michie Hunt, president of health care consultants Michie I Hunt & Associates. Waxman-Hatch and other laws awarded longer patent terms to some key drugs and encouraged brand firms to engage in practices such as "evergreening," she said, while a patent system which rewards only the most innovative and truly new drugs and does more to encourage competition from generic drugs would substantially benefit the aging US population.