New Report on Patent Litigation Settlements Says that they are Critically Necessary to Ensure Prompt Generic and Biosimilar Market Entry

Earlier this month, the Association for Accessible Medicines and its Biosimilars Council (“AAM”) announced (here and here) the release of a report, titled “Assessment of the Impact of Settlements,” examining the effects of patent litigation settlements on patient savings and access to generic drugs and biosimilar biological products.  The report, based on research and analysis undertaken by the IQVIA Institute for AAM, concludes “that patent settlements between brand and generic/biosimilar medicine manufacturers accelerated patient access to generic and biosimilar medicines to market by, on average, more than five years before patent expiration,” and that there were significant healthcare system savings.

That the IQVIA Institute concluded that patent settlement agreements are a good thing is not news to this blogger.  That’s pretty much the message this blogger has been saying in posts on this blog for years (here): If you limit a generic drug manufacturer’s ability to settle cases, that manufacturer does not settle fewer cases, it submits fewer Paragraph IV ANDAs; fewer ANDAs means less, not more, generic drug competition.  And now we have a pretty comprehensive data set from the IQVIA Institute to show the positive effects of patent settlement agreements.

As detailed in the report, the IQVIA Institute assessed 288 molecules for settlement information, 84 of which involved patent settlements and early or timely generic/biosimilar entry.  And of that cohort, the IQVIA Institute found that product launches averaged 64 months (more than 5 years!) before patent expiry (with 17% of the cases accelerating generic or biosimilar entry by more than a decade prior to patent expiry).  We all know that time is money.  The IQVIA Institute report shows just how much money: “Savings to the healthcare system from patent settlements since the FTC v. Actavis decision in 2013 total $423 billion, and the average savings to the healthcare system per molecule are $5 billion.”

The report was published just a week before the Federal Trade Commission and the Department of Justice announced a series of “listening sessions” intended to implement, in part, Executive Order No. 14273, Lowering Drug Prices by Once Again Putting Americans First.  According to a recent description of the listening sessions, one panel will look at “recent trends in pharmaceutical patent settlements.”  Given the FTC’s long history of opposition to patent litigation settlement agreements in general, we suspect there may be a renewed effort to fan the flames and push for the passage of legislation (see our earlier post here) that we think would ultimately chill procompetitive patent settlement agreements.  But maybe the data from the IQVIA Institute detailed in AAM’s new report can put a wet blanket on those efforts.