The term “pay-for-delay” refers to a tactic used by brand name drug manufacturers to delay a potential competitor from bringing a generic drug alternative to market.
Usually in the form of a cash payment, pay-for-delay transactions result from a patent dispute settlement between a brand name and generic company.
The Federal Trade Commission (FTC) has cited these arrangements as anticompetitive, and estimates that they cost consumers and taxpayers $3.5 billion in higher drug costs every year due to a lack of competition from cheaper generics.
- Provides background on drug patents and market exclusivity
- Discusses how pay-for-delay impacts drug pricing and competition among drug manufacturers
- Highlights recent stakeholder actions around pay-for-delay