Press Release

PhRMA Statement on Patent Settlements

PhRMA January 3, 2010

Washington, D.C. (January 13, 2010) — Pharmaceutical Research and Manufacturers of America (PhRMA) Executive Vice President and General Counsel Diane Bieri issued the following statement today about a Federal Trade Commission report on settlements between brand-name and generics companies:

“The Federal Trade Commission’s report on patent settlements misrepresents legal agreements that can help to resolve expensive patent disputes, thereby fostering innovation and improving access to medicines.

“The fact is, Congress has already given enforcement authorities the ability to review and evaluate patent settlement agreements. Thus far, the FTC has not made the case as to why these current powers are inadequate. Contrary to FTC’s assertion, patent settlements do not prevent entry of a generic to the market. In fact, many allow generic competition to legally enter the U.S. market prior to patent expiration, saving consumers billions of dollars.

“Under the current system, settlements are monitored by enforcement agencies – such as the FTC – as well as the courts. A ban on certain types of important legal agreements would remove the decision-making process from these appropriate venues.

“Moreover, a blanket ban on certain types of patent settlements could decrease the value of patents, remove an important option for a patent-holder’s defense of intellectual property, and reduce the incentives for future innovation of new medicines. A ban would also prevent the settlements that would expedite patient access to generic medicines.

“FTC is misguided in its attempt to advocate for a blanket ban on patent settlements that have been proven to be pro-competitive.”

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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