PhRMA Statement on Patent Settlements

PhRMA Statement on Patent Settlements

Washington, D.C. (June 28, 2010) — Pharmaceutical Research and Manufacturers of America (PhRMA) Senior Vice President Ken Johnson issued the following statement today regarding patent settlement language in the House war supplemental bill:

“Patent settlements are a vital aspect of the ability to protect intellectual property. PhRMA believes including the provision on restricting patent settlements can discourage pro-consumer settlements that often bring generics to market years before patent expiration.

“Law and public policy have always favored settlements, including patent settlements. PhRMA continues to believe that legislation that would impose a blanket ban on certain types of patent settlements or otherwise prevent them could decrease the value of patents and reduce incentives for future innovation of new medicines. This is also unnecessary because the Federal Trade Commission (FTC) and others already have the authority to review and evaluate any patent settlement agreement between a brand name company and a generic company. The courts and enforcement agencies like the FTC are in the best position to review these settlements on a case-by-case basis to ensure that they are not harmful to competition. By imposing a general ban or imposing harsh disincentives, pending legislation would effectively remove the decision-making process from this appropriate venue.

“Settlements resolve costly and time-consuming patent litigation and often allow the generic version of a medicine to enter the market before the patent is due to expire. Basic economics shows us that this can help increase competition between brand-name and generic companies, lower costs for American consumers and increase access and choice for patients.

“Our number one priority is to help patients win the battle against disease. We believe that this can continue to be achieved with policies that help foster innovation and promote patient access to life-saving and life-enhancing medicines, rather than legislation that imposes blanket bans or disincentives that could stymie this goal. PhRMA believes that each settlement between a brand and generic should be judged on its own merit, taking all the facts into account, and the FTC, Department of Justice and the courts are well-equipped to evaluate individual settlements and determine whether they will help or hurt consumers.”


The Pharmaceutical Research and Manufacturers of America (PhRMA) represents the country’s leading pharmaceutical research and biotechnology companies, which are devoted to inventing medicines that allow patients to live longer, healthier, and more productive lives. PhRMA companies are leading the way in the search for new cures. PhRMA members alone invested an estimated $50.3 billion in 2008 in discovering and developing new medicines. Industry-wide research and investment reached a record $65.2 billion in 2008.

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